Correlation Between DOCDATA and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both DOCDATA 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 DOCDATA and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOCDATA and Xenia Hotels Resorts, you can compare the effects of market volatilities on DOCDATA 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 DOCDATA with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOCDATA and Xenia Hotels.
Diversification Opportunities for DOCDATA and Xenia Hotels
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DOCDATA and Xenia is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding DOCDATA 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 DOCDATA 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 DOCDATA 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 DOCDATA i.e., DOCDATA and Xenia Hotels go up and down completely randomly.
Pair Corralation between DOCDATA and Xenia Hotels
Assuming the 90 days trading horizon DOCDATA is expected to under-perform the Xenia Hotels. In addition to that, DOCDATA is 1.61 times more volatile than Xenia Hotels Resorts. It trades about 0.0 of its total potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.14 per unit of volatility. If you would invest 1,330 in Xenia Hotels Resorts on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Xenia Hotels Resorts or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DOCDATA vs. Xenia Hotels Resorts
Performance |
| Timeline |
| DOCDATA |
| Xenia Hotels Resorts |
DOCDATA and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DOCDATA and Xenia Hotels
The main advantage of trading using opposite DOCDATA and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOCDATA 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.| DOCDATA vs. SIVERS SEMICONDUCTORS AB | DOCDATA vs. Darden Restaurants | DOCDATA vs. Reliance Steel Aluminum | DOCDATA vs. Q2M Managementberatung AG |
| Xenia Hotels vs. CARSALESCOM | Xenia Hotels vs. SMA Solar Technology | Xenia Hotels vs. Tradeweb Markets | Xenia Hotels vs. AECOM TECHNOLOGY |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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