Correlation Between MTI WIRELESS and Host Hotels
Can any of the company-specific risk be diversified away by investing in both MTI WIRELESS 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 MTI WIRELESS and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI WIRELESS EDGE and Host Hotels Resorts, you can compare the effects of market volatilities on MTI WIRELESS 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 MTI WIRELESS with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI WIRELESS and Host Hotels.
Diversification Opportunities for MTI WIRELESS and Host Hotels
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MTI and Host is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MTI WIRELESS EDGE 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 MTI WIRELESS 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 MTI WIRELESS EDGE 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 MTI WIRELESS i.e., MTI WIRELESS and Host Hotels go up and down completely randomly.
Pair Corralation between MTI WIRELESS and Host Hotels
Assuming the 90 days horizon MTI WIRELESS EDGE is expected to generate 3.48 times more return on investment than Host Hotels. However, MTI WIRELESS is 3.48 times more volatile than Host Hotels Resorts. It trades about 0.02 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.03 per unit of risk. If you would invest 50.00 in MTI WIRELESS EDGE on August 31, 2024 and sell it today you would lose (5.00) from holding MTI WIRELESS EDGE or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
MTI WIRELESS EDGE vs. Host Hotels Resorts
Performance |
| Timeline |
| MTI WIRELESS EDGE |
| Host Hotels Resorts |
MTI WIRELESS and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI WIRELESS and Host Hotels
The main advantage of trading using opposite MTI WIRELESS and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI WIRELESS 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.| MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc |
| Host Hotels vs. Park Hotels Resorts | Host Hotels vs. Pebblebrook Hotel Trust | Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. ASHFORD HOSPITTRUST |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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