Correlation Between EMPEROR ENT and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both EMPEROR ENT 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 EMPEROR ENT and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMPEROR ENT HOTEL and Xenia Hotels Resorts, you can compare the effects of market volatilities on EMPEROR ENT 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 EMPEROR ENT with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMPEROR ENT and Xenia Hotels.
Diversification Opportunities for EMPEROR ENT and Xenia Hotels
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMPEROR and Xenia is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding EMPEROR ENT 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 EMPEROR ENT 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 EMPEROR ENT 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 EMPEROR ENT i.e., EMPEROR ENT and Xenia Hotels go up and down completely randomly.
Pair Corralation between EMPEROR ENT and Xenia Hotels
Assuming the 90 days trading horizon EMPEROR ENT HOTEL is expected to generate 5.24 times more return on investment than Xenia Hotels. However, EMPEROR ENT is 5.24 times more volatile than Xenia Hotels Resorts. It trades about 0.06 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.03 per unit of risk. If you would invest 2.40 in EMPEROR ENT HOTEL on October 12, 2024 and sell it today you would earn a total of 1.10 from holding EMPEROR ENT HOTEL or generate 45.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMPEROR ENT HOTEL vs. Xenia Hotels Resorts
Performance |
| Timeline |
| EMPEROR ENT HOTEL |
| Xenia Hotels Resorts |
EMPEROR ENT and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMPEROR ENT and Xenia Hotels
The main advantage of trading using opposite EMPEROR ENT and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMPEROR ENT 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.| EMPEROR ENT vs. PURETECH HEALTH PLC | EMPEROR ENT vs. Planet Fitness | EMPEROR ENT vs. Acadia Healthcare | EMPEROR ENT vs. AXWAY SOFTWARE EO |
| Xenia Hotels vs. ETFS Coffee ETC | Xenia Hotels vs. Shenzhen Investment Limited | Xenia Hotels vs. Apollo Investment Corp | Xenia Hotels vs. SLR Investment Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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