Correlation Between Host Hotels and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both Host Hotels and WUXI BIOLOGICS 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 WUXI BIOLOGICS 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 WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on Host Hotels and WUXI BIOLOGICS 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 WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and WUXI BIOLOGICS.
Diversification Opportunities for Host Hotels and WUXI BIOLOGICS
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Host and WUXI is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 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 WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of Host Hotels i.e., Host Hotels and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between Host Hotels and WUXI BIOLOGICS
Assuming the 90 days horizon Host Hotels Resorts is expected to under-perform the WUXI BIOLOGICS. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 1.56 times less risky than WUXI BIOLOGICS. The stock trades about -0.22 of its potential returns per unit of risk. The WUXI BIOLOGICS UNSPADR2 is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 432.00 in WUXI BIOLOGICS UNSPADR2 on October 11, 2024 and sell it today you would lose (22.00) from holding WUXI BIOLOGICS UNSPADR2 or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| Host Hotels Resorts |
| WUXI BIOLOGICS UNSPADR2 |
Host Hotels and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and WUXI BIOLOGICS
The main advantage of trading using opposite Host Hotels and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| Host Hotels vs. GRUPO CARSO A1 | Host Hotels vs. Mitsubishi Gas Chemical | Host Hotels vs. Motorcar Parts of | Host Hotels vs. CarsalesCom |
| WUXI BIOLOGICS vs. Host Hotels Resorts | WUXI BIOLOGICS vs. National Beverage Corp | WUXI BIOLOGICS vs. MTY Food Group | WUXI BIOLOGICS vs. Wyndham 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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