Correlation Between Host Hotels and MTI WIRELESS
Can any of the company-specific risk be diversified away by investing in both Host Hotels and MTI WIRELESS 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 MTI WIRELESS 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 MTI WIRELESS EDGE, you can compare the effects of market volatilities on Host Hotels and MTI WIRELESS 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 MTI WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and MTI WIRELESS.
Diversification Opportunities for Host Hotels and MTI WIRELESS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Host and MTI is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and MTI WIRELESS EDGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI WIRELESS EDGE 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 MTI WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI WIRELESS EDGE has no effect on the direction of Host Hotels i.e., Host Hotels and MTI WIRELESS go up and down completely randomly.
Pair Corralation between Host Hotels and MTI WIRELESS
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.92 times more return on investment than MTI WIRELESS. However, Host Hotels Resorts is 1.08 times less risky than MTI WIRELESS. It trades about 0.14 of its potential returns per unit of risk. MTI WIRELESS EDGE is currently generating about -0.18 per unit of risk. If you would invest 1,610 in Host Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 110.00 from holding Host Hotels Resorts or generate 6.83% 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. MTI WIRELESS EDGE
Performance |
| Timeline |
| Host Hotels Resorts |
| MTI WIRELESS EDGE |
Host Hotels and MTI WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and MTI WIRELESS
The main advantage of trading using opposite Host Hotels and MTI WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, MTI WIRELESS 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 MTI WIRELESS will offset losses from the drop in MTI WIRELESS's long position.| Host Hotels vs. VIAPLAY GROUP AB | Host Hotels vs. CVW CLEANTECH INC | Host Hotels vs. COLUMBIA SPORTSWEAR | Host Hotels vs. ANTA SPORTS PRODUCT |
| MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings 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 | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |