Correlation Between Expand Energy and American Hotel
Can any of the company-specific risk be diversified away by investing in both Expand Energy and American Hotel 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 Expand Energy and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and American Hotel Income, you can compare the effects of market volatilities on Expand Energy and American Hotel 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 Expand Energy with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and American Hotel.
Diversification Opportunities for Expand Energy and American Hotel
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Expand and American is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Expand Energy 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 Expand Energy are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Expand Energy i.e., Expand Energy and American Hotel go up and down completely randomly.
Pair Corralation between Expand Energy and American Hotel
Assuming the 90 days horizon Expand Energy is expected to generate 0.33 times more return on investment than American Hotel. However, Expand Energy is 3.05 times less risky than American Hotel. It trades about 0.35 of its potential returns per unit of risk. American Hotel Income is currently generating about 0.1 per unit of risk. If you would invest 8,963 in Expand Energy on November 3, 2024 and sell it today you would earn a total of 1,169 from holding Expand Energy or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. American Hotel Income
Performance |
| Timeline |
| Expand Energy |
| American Hotel Income |
Expand Energy and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and American Hotel
The main advantage of trading using opposite Expand Energy and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Expand Energy vs. Grupo Aeroportuario del | Expand Energy vs. Mako Mining Corp | Expand Energy vs. ioneer Ltd American | Expand Energy vs. Harmony Gold Mining |
| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Braemar Hotels Resorts | American Hotel vs. Braemar Hotels Resorts |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |