Correlation Between Host Hotels and CAREER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Host Hotels and CAREER EDUCATION 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 CAREER EDUCATION 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 CAREER EDUCATION, you can compare the effects of market volatilities on Host Hotels and CAREER EDUCATION 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 CAREER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and CAREER EDUCATION.
Diversification Opportunities for Host Hotels and CAREER EDUCATION
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Host and CAREER is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and CAREER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAREER EDUCATION 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 CAREER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAREER EDUCATION has no effect on the direction of Host Hotels i.e., Host Hotels and CAREER EDUCATION go up and down completely randomly.
Pair Corralation between Host Hotels and CAREER EDUCATION
Assuming the 90 days horizon Host Hotels Resorts is expected to under-perform the CAREER EDUCATION. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 1.02 times less risky than CAREER EDUCATION. The stock trades about -0.17 of its potential returns per unit of risk. The CAREER EDUCATION is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,500 in CAREER EDUCATION on November 6, 2024 and sell it today you would earn a total of 240.00 from holding CAREER EDUCATION or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. CAREER EDUCATION
Performance |
| Timeline |
| Host Hotels Resorts |
| CAREER EDUCATION |
Host Hotels and CAREER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and CAREER EDUCATION
The main advantage of trading using opposite Host Hotels and CAREER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, CAREER EDUCATION 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 CAREER EDUCATION will offset losses from the drop in CAREER EDUCATION's long position.| Host Hotels vs. Playa Hotels Resorts | Host Hotels vs. Fast Retailing Co | Host Hotels vs. HYATT HOTELS A | Host Hotels vs. SCANSOURCE |
| CAREER EDUCATION vs. Cogent Communications Holdings | CAREER EDUCATION vs. Infrastrutture Wireless Italiane | CAREER EDUCATION vs. TELECOM ITALRISP ADR10 | CAREER EDUCATION vs. Verizon Communications |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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