Correlation Between Lion One and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Lion One and Host 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 Lion One and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Host Hotels Resorts, you can compare the effects of market volatilities on Lion One and Host 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 Lion One with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Host Hotels.
Diversification Opportunities for Lion One and Host Hotels
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Host is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and Lion One 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 Lion One Metals are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Lion One i.e., Lion One and Host Hotels go up and down completely randomly.
Pair Corralation between Lion One and Host Hotels
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Host Hotels. In addition to that, Lion One is 1.63 times more volatile than Host Hotels Resorts. It trades about -0.05 of its total potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.21 per unit of volatility. If you would invest 1,570 in Host Hotels Resorts on September 4, 2024 and sell it today you would earn a total of 160.00 from holding Host Hotels Resorts or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Host Hotels Resorts
Performance |
| Timeline |
| Lion One Metals |
| Host Hotels Resorts |
Lion One and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Host Hotels
The main advantage of trading using opposite Lion One and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Host 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Lion One vs. HEALTHCARE REAL A | Lion One vs. Goosehead Insurance | Lion One vs. INSURANCE AUST GRP | Lion One vs. SBI Insurance Group |
| Host Hotels vs. MOLSON RS BEVERAGE | Host Hotels vs. Zijin Mining Group | Host Hotels vs. Ebro Foods SA | Host Hotels vs. GALENA MINING LTD |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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