Correlation Between DALATA HOTEL and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both DALATA HOTEL and Xenia 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 DALATA HOTEL and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DALATA HOTEL and Xenia Hotels Resorts, you can compare the effects of market volatilities on DALATA HOTEL and Xenia 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 DALATA HOTEL with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of DALATA HOTEL and Xenia Hotels.
Diversification Opportunities for DALATA HOTEL and Xenia Hotels
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DALATA and Xenia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding DALATA HOTEL and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts and DALATA HOTEL 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 DALATA HOTEL are associated (or correlated) with Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of DALATA HOTEL i.e., DALATA HOTEL and Xenia Hotels go up and down completely randomly.
Pair Corralation between DALATA HOTEL and Xenia Hotels
Assuming the 90 days trading horizon DALATA HOTEL is expected to generate 1.97 times more return on investment than Xenia Hotels. However, DALATA HOTEL is 1.97 times more volatile than Xenia Hotels Resorts. It trades about 0.03 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.02 per unit of risk. If you would invest 361.00 in DALATA HOTEL on November 5, 2024 and sell it today you would earn a total of 77.00 from holding DALATA HOTEL or generate 21.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DALATA HOTEL vs. Xenia Hotels Resorts
Performance |
| Timeline |
| DALATA HOTEL |
| Xenia Hotels Resorts |
DALATA HOTEL and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DALATA HOTEL and Xenia Hotels
The main advantage of trading using opposite DALATA HOTEL and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DALATA HOTEL position performs unexpectedly, Xenia 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| DALATA HOTEL vs. Zijin Mining Group | DALATA HOTEL vs. GALENA MINING LTD | DALATA HOTEL vs. SOEDER SPORTFISKE AB | DALATA HOTEL vs. MAG SILVER |
| Xenia Hotels vs. Gaztransport Technigaz SA | Xenia Hotels vs. SCANSOURCE | Xenia Hotels vs. Alfa Financial Software | Xenia Hotels vs. Casio Computer CoLtd |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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