Correlation Between Host Hotels and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Host Hotels and WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE, you can compare the effects of market volatilities on Host Hotels and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and WT OFFSHORE.
Diversification Opportunities for Host Hotels and WT OFFSHORE
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Host and UWV is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Host Hotels i.e., Host Hotels and WT OFFSHORE go up and down completely randomly.
Pair Corralation between Host Hotels and WT OFFSHORE
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.34 times more return on investment than WT OFFSHORE. However, Host Hotels Resorts is 2.91 times less risky than WT OFFSHORE. It trades about -0.09 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.04 per unit of risk. If you would invest 1,710 in Host Hotels Resorts on October 25, 2024 and sell it today you would lose (90.00) from holding Host Hotels Resorts or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. WT OFFSHORE
Performance |
| Timeline |
| Host Hotels Resorts |
| WT OFFSHORE |
Host Hotels and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and WT OFFSHORE
The main advantage of trading using opposite Host Hotels and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| Host Hotels vs. Cars Inc | Host Hotels vs. Zoom Video Communications | Host Hotels vs. Geely Automobile Holdings | Host Hotels vs. Singapore Telecommunications Limited |
| WT OFFSHORE vs. Micron Technology | WT OFFSHORE vs. AEON STORES | WT OFFSHORE vs. Charter Communications | WT OFFSHORE vs. Align Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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