Correlation Between Host Hotels and QUEEN S
Can any of the company-specific risk be diversified away by investing in both Host Hotels and QUEEN S 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 QUEEN S 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 QUEEN S ROAD, you can compare the effects of market volatilities on Host Hotels and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and QUEEN S.
Diversification Opportunities for Host Hotels and QUEEN S
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Host and QUEEN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of Host Hotels i.e., Host Hotels and QUEEN S go up and down completely randomly.
Pair Corralation between Host Hotels and QUEEN S
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.47 times more return on investment than QUEEN S. However, Host Hotels Resorts is 2.14 times less risky than QUEEN S. It trades about -0.22 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about -0.24 per unit of risk. If you would invest 1,749 in Host Hotels Resorts on October 11, 2024 and sell it today you would lose (109.00) from holding Host Hotels Resorts or give up 6.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. QUEEN S ROAD
Performance |
| Timeline |
| Host Hotels Resorts |
| QUEEN S ROAD |
Host Hotels and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and QUEEN S
The main advantage of trading using opposite Host Hotels and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| Host Hotels vs. Suntory Beverage Food | Host Hotels vs. American Public Education | Host Hotels vs. EMBARK EDUCATION LTD | Host Hotels vs. China Resources Beer |
| QUEEN S vs. INTERSHOP Communications Aktiengesellschaft | QUEEN S vs. PENN NATL GAMING | QUEEN S vs. Entravision Communications | QUEEN S vs. HOCHSCHILD MINING |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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