Correlation Between Host Hotels and Materialise
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Materialise 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 Host Hotels and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and Materialise NV, you can compare the effects of market volatilities on Host Hotels and Materialise 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 Host Hotels with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Materialise.
Diversification Opportunities for Host Hotels and Materialise
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Host and Materialise is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Host Hotels 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 Host Hotels Resorts are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Host Hotels i.e., Host Hotels and Materialise go up and down completely randomly.
Pair Corralation between Host Hotels and Materialise
Assuming the 90 days horizon Host Hotels is expected to generate 2.63 times less return on investment than Materialise. But when comparing it to its historical volatility, Host Hotels Resorts is 3.0 times less risky than Materialise. It trades about 0.22 of its potential returns per unit of risk. Materialise NV is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Materialise NV on September 13, 2024 and sell it today you would earn a total of 110.00 from holding Materialise NV or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Materialise NV
Performance |
| Timeline |
| Host Hotels Resorts |
| Materialise NV |
Host Hotels and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Materialise
The main advantage of trading using opposite Host Hotels and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. Xenia Hotels Resorts | Host Hotels vs. Summit Hotel Properties | Host Hotels vs. ASHFORD HOSPITTRUST |
| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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