Correlation Between Host Hotels and MTY Food
Can any of the company-specific risk be diversified away by investing in both Host Hotels and MTY Food 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 MTY Food 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 MTY Food Group, you can compare the effects of market volatilities on Host Hotels and MTY Food 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 MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and MTY Food.
Diversification Opportunities for Host Hotels and MTY Food
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Host and MTY is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and MTY Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTY Food Group 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 MTY Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTY Food Group has no effect on the direction of Host Hotels i.e., Host Hotels and MTY Food go up and down completely randomly.
Pair Corralation between Host Hotels and MTY Food
Assuming the 90 days horizon Host Hotels Resorts is expected to under-perform the MTY Food. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 1.43 times less risky than MTY Food. The stock trades about -0.17 of its potential returns per unit of risk. The MTY Food Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,165 in MTY Food Group on November 5, 2024 and sell it today you would earn a total of 170.00 from holding MTY Food Group or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. MTY Food Group
Performance |
| Timeline |
| Host Hotels Resorts |
| MTY Food Group |
Host Hotels and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and MTY Food
The main advantage of trading using opposite Host Hotels and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, MTY Food 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 MTY Food will offset losses from the drop in MTY Food's long position.| Host Hotels vs. PARKEN Sport Entertainment | Host Hotels vs. Air Transport Services | Host Hotels vs. Sumitomo Mitsui Construction | Host Hotels vs. WIMFARM SA EO |
| MTY Food vs. CENTURIA OFFICE REIT | MTY Food vs. alstria office REIT AG | MTY Food vs. Corporate Office Properties | MTY Food vs. Lendlease Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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