Correlation Between Hansa Investment and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Hansa Investment 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 Hansa Investment and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and Host Hotels Resorts, you can compare the effects of market volatilities on Hansa Investment 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 Hansa Investment with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and Host Hotels.
Diversification Opportunities for Hansa Investment and Host Hotels
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hansa and Host is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment 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 Hansa Investment 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 Hansa Investment 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 Hansa Investment i.e., Hansa Investment and Host Hotels go up and down completely randomly.
Pair Corralation between Hansa Investment and Host Hotels
Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.92 times more return on investment than Host Hotels. However, Hansa Investment is 1.09 times less risky than Host Hotels. It trades about 0.04 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.04 per unit of risk. If you would invest 20,799 in Hansa Investment on August 28, 2024 and sell it today you would earn a total of 1,301 from holding Hansa Investment or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Hansa Investment vs. Host Hotels Resorts
Performance |
| Timeline |
| Hansa Investment |
| Host Hotels Resorts |
Hansa Investment and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and Host Hotels
The main advantage of trading using opposite Hansa Investment and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment 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.| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. BH Macro Limited | Hansa Investment vs. TMT Investments PLC | Hansa Investment vs. Intermediate Capital Group |
| Host Hotels vs. JLEN Environmental Assets | Host Hotels vs. Baker Steel Resources | Host Hotels vs. Indutrade AB | Host Hotels vs. L3Harris Technologies |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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