Correlation Between Xtrackers ShortDAX and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Host Hotels at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xtrackers ShortDAX and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Host Hotels Resorts, you can compare the effects of market volatilities on Xtrackers ShortDAX and Host Hotels and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xtrackers ShortDAX with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Host Hotels.
Diversification Opportunities for Xtrackers ShortDAX and Host Hotels
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Host is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and Xtrackers ShortDAX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xtrackers ShortDAX are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Host Hotels go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Host Hotels
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.92 times more return on investment than Host Hotels. However, Xtrackers ShortDAX is 1.09 times less risky than Host Hotels. It trades about 0.01 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.01 per unit of risk. If you would invest 86.00 in Xtrackers ShortDAX on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Xtrackers ShortDAX or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Host Hotels Resorts
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Host Hotels Resorts |
Xtrackers ShortDAX and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Host Hotels
The main advantage of trading using opposite Xtrackers ShortDAX and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Host Hotels can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Host Hotels will offset losses from the drop in Host Hotels' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Host Hotels vs. DELTA AIR LINES | Host Hotels vs. Tower One Wireless | Host Hotels vs. Altair Engineering | Host Hotels vs. 24SEVENOFFICE GROUP AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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