Correlation Between Host Hotels and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Commonwealth Bank 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 Commonwealth Bank 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 Commonwealth Bank of, you can compare the effects of market volatilities on Host Hotels and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Commonwealth Bank.
Diversification Opportunities for Host Hotels and Commonwealth Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Host and Commonwealth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Host Hotels i.e., Host Hotels and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Host Hotels and Commonwealth Bank
Assuming the 90 days horizon Host Hotels Resorts is expected to under-perform the Commonwealth Bank. In addition to that, Host Hotels is 1.05 times more volatile than Commonwealth Bank of. It trades about -0.19 of its total potential returns per unit of risk. Commonwealth Bank of is currently generating about -0.11 per unit of volatility. If you would invest 9,239 in Commonwealth Bank of on December 11, 2024 and sell it today you would lose (566.00) from holding Commonwealth Bank of or give up 6.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Commonwealth Bank of
Performance |
| Timeline |
| Host Hotels Resorts |
| Commonwealth Bank |
Host Hotels and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Commonwealth Bank
The main advantage of trading using opposite Host Hotels and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Host Hotels vs. CORNISH METALS INC | Host Hotels vs. MCEWEN MINING INC | Host Hotels vs. Fortescue Metals Group | Host Hotels vs. MAGNUM MINING EXP |
| Commonwealth Bank vs. Chengdu PUTIAN Telecommunications | Commonwealth Bank vs. Tower One Wireless | Commonwealth Bank vs. Mobilezone Holding AG | Commonwealth Bank vs. T MOBILE US |
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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