Correlation Between Deltex Medical and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Deltex Medical 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 Deltex Medical and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and Host Hotels Resorts, you can compare the effects of market volatilities on Deltex Medical 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 Deltex Medical with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Host Hotels.
Diversification Opportunities for Deltex Medical and Host Hotels
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deltex and Host is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group 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 Deltex Medical 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 Deltex Medical Group 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 Deltex Medical i.e., Deltex Medical and Host Hotels go up and down completely randomly.
Pair Corralation between Deltex Medical and Host Hotels
Assuming the 90 days trading horizon Deltex Medical Group is expected to generate 1.39 times more return on investment than Host Hotels. However, Deltex Medical is 1.39 times more volatile than Host Hotels Resorts. It trades about 0.01 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about -0.2 per unit of risk. If you would invest 8.00 in Deltex Medical Group on October 9, 2024 and sell it today you would earn a total of 0.00 from holding Deltex Medical Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Deltex Medical Group vs. Host Hotels Resorts
Performance |
| Timeline |
| Deltex Medical Group |
| Host Hotels Resorts |
Deltex Medical and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Host Hotels
The main advantage of trading using opposite Deltex Medical and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical 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.| Deltex Medical vs. Berkshire Hathaway | Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Chocoladefabriken Lindt Spruengli |
| Host Hotels vs. Mobius Investment Trust | Host Hotels vs. Lindsell Train Investment | Host Hotels vs. BlackRock Frontiers Investment | Host Hotels vs. New Residential Investment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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