Correlation Between Host Hotels and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both Host Hotels and ONWARD MEDICAL 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV, you can compare the effects of market volatilities on Host Hotels and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and ONWARD MEDICAL.
Diversification Opportunities for Host Hotels and ONWARD MEDICAL
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Host and ONWARD is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Host Hotels i.e., Host Hotels and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between Host Hotels and ONWARD MEDICAL
Assuming the 90 days horizon Host Hotels is expected to generate 2.12 times less return on investment than ONWARD MEDICAL. But when comparing it to its historical volatility, Host Hotels Resorts is 3.64 times less risky than ONWARD MEDICAL. It trades about 0.03 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 582.00 in ONWARD MEDICAL BV on September 1, 2024 and sell it today you would lose (136.00) from holding ONWARD MEDICAL BV or give up 23.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| Host Hotels Resorts |
| ONWARD MEDICAL BV |
Host Hotels and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and ONWARD MEDICAL
The main advantage of trading using opposite Host Hotels and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| Host Hotels vs. Park Hotels Resorts | Host Hotels vs. Pebblebrook Hotel Trust | Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. ASHFORD HOSPITTRUST |
| ONWARD MEDICAL vs. Superior Plus Corp | ONWARD MEDICAL vs. NMI Holdings | ONWARD MEDICAL vs. Origin Agritech | ONWARD MEDICAL vs. SIVERS SEMICONDUCTORS AB |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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