Correlation Between Host Hotels and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both Host Hotels and COVIVIO 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 Host Hotels and COVIVIO HOTELS 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 COVIVIO HOTELS INH, you can compare the effects of market volatilities on Host Hotels and COVIVIO 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 Host Hotels with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and COVIVIO HOTELS.
Diversification Opportunities for Host Hotels and COVIVIO HOTELS
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Host and COVIVIO is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of Host Hotels i.e., Host Hotels and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between Host Hotels and COVIVIO HOTELS
Assuming the 90 days horizon Host Hotels is expected to generate 1.21 times less return on investment than COVIVIO HOTELS. In addition to that, Host Hotels is 1.13 times more volatile than COVIVIO HOTELS INH. It trades about 0.03 of its total potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.04 per unit of volatility. If you would invest 1,541 in COVIVIO HOTELS INH on August 31, 2024 and sell it today you would earn a total of 269.00 from holding COVIVIO HOTELS INH or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Host Hotels Resorts vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| Host Hotels Resorts |
| COVIVIO HOTELS INH |
Host Hotels and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and COVIVIO HOTELS
The main advantage of trading using opposite Host Hotels and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, COVIVIO 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS'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 |
| COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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