Correlation Between Host Hotels and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Host Hotels and CompuGroup 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 CompuGroup 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 CompuGroup Medical SE, you can compare the effects of market volatilities on Host Hotels and CompuGroup 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and CompuGroup Medical.
Diversification Opportunities for Host Hotels and CompuGroup Medical
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Host and CompuGroup is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Host Hotels i.e., Host Hotels and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Host Hotels and CompuGroup Medical
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.57 times more return on investment than CompuGroup Medical. However, Host Hotels Resorts is 1.76 times less risky than CompuGroup Medical. It trades about 0.04 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.02 per unit of risk. If you would invest 1,398 in Host Hotels Resorts on September 14, 2024 and sell it today you would earn a total of 382.00 from holding Host Hotels Resorts or generate 27.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. CompuGroup Medical SE
Performance |
| Timeline |
| Host Hotels Resorts |
| CompuGroup Medical |
Host Hotels and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and CompuGroup Medical
The main advantage of trading using opposite Host Hotels and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, CompuGroup 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Host Hotels vs. MTI WIRELESS EDGE | Host Hotels vs. PICKN PAY STORES | Host Hotels vs. BJs Wholesale Club | Host Hotels vs. Fast Retailing Co |
| CompuGroup Medical vs. CITY OFFICE REIT | CompuGroup Medical vs. InterContinental Hotels Group | CompuGroup Medical vs. Host Hotels Resorts | CompuGroup Medical vs. MIRAMAR HOTEL INV |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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