Correlation Between Host Hotels and Regal Hotels
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Regal Hotels 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 Regal Hotels 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 Regal Hotels International, you can compare the effects of market volatilities on Host Hotels and Regal Hotels 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 Regal Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Regal Hotels.
Diversification Opportunities for Host Hotels and Regal Hotels
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Host and Regal is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Regal Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Hotels Interna 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 Regal Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Hotels Interna has no effect on the direction of Host Hotels i.e., Host Hotels and Regal Hotels go up and down completely randomly.
Pair Corralation between Host Hotels and Regal Hotels
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 1.35 times more return on investment than Regal Hotels. However, Host Hotels is 1.35 times more volatile than Regal Hotels International. It trades about 0.14 of its potential returns per unit of risk. Regal Hotels International is currently generating about 0.1 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Regal Hotels International
Performance |
| Timeline |
| Host Hotels Resorts |
| Regal Hotels Interna |
Host Hotels and Regal Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Regal Hotels
The main advantage of trading using opposite Host Hotels and Regal Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Regal Hotels 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 Regal Hotels will offset losses from the drop in Regal Hotels' 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 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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