Correlation Between Ecofin Global and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Ecofin Global 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 Ecofin Global and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and Host Hotels Resorts, you can compare the effects of market volatilities on Ecofin Global 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 Ecofin Global with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and Host Hotels.
Diversification Opportunities for Ecofin Global and Host Hotels
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecofin and Host is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities 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 Ecofin Global 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 Ecofin Global Utilities 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 Ecofin Global i.e., Ecofin Global and Host Hotels go up and down completely randomly.
Pair Corralation between Ecofin Global and Host Hotels
Assuming the 90 days trading horizon Ecofin Global Utilities is expected to generate 1.21 times more return on investment than Host Hotels. However, Ecofin Global is 1.21 times more volatile than Host Hotels Resorts. It trades about -0.04 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 19,000 in Ecofin Global Utilities on October 9, 2024 and sell it today you would lose (350.00) from holding Ecofin Global Utilities or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ecofin Global Utilities vs. Host Hotels Resorts
Performance |
| Timeline |
| Ecofin Global Utilities |
| Host Hotels Resorts |
Ecofin Global and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and Host Hotels
The main advantage of trading using opposite Ecofin Global and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global 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.| Ecofin Global vs. Wheaton Precious Metals | Ecofin Global vs. Science in Sport | Ecofin Global vs. Capital Metals PLC | Ecofin Global vs. Solstad Offshore ASA |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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