Correlation Between Host Hotels and Hongkong
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Hongkong 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 Hongkong 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 The Hongkong and, you can compare the effects of market volatilities on Host Hotels and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Hongkong.
Diversification Opportunities for Host Hotels and Hongkong
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Host and Hongkong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of Host Hotels i.e., Host Hotels and Hongkong go up and down completely randomly.
Pair Corralation between Host Hotels and Hongkong
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.58 times more return on investment than Hongkong. However, Host Hotels Resorts is 1.72 times less risky than Hongkong. It trades about 0.02 of its potential returns per unit of risk. The Hongkong and is currently generating about 0.0 per unit of risk. If you would invest 1,441 in Host Hotels Resorts on October 11, 2024 and sell it today you would earn a total of 199.00 from holding Host Hotels Resorts or generate 13.81% 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. The Hongkong and
Performance |
| Timeline |
| Host Hotels Resorts |
| The Hongkong |
Host Hotels and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Hongkong
The main advantage of trading using opposite Host Hotels and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| Host Hotels vs. GRUPO CARSO A1 | Host Hotels vs. Mitsubishi Gas Chemical | Host Hotels vs. Motorcar Parts of | Host Hotels vs. CarsalesCom |
| Hongkong vs. Host Hotels Resorts | Hongkong vs. QUEEN S ROAD | Hongkong vs. DALATA HOTEL | Hongkong vs. Park Hotels Resorts |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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