Correlation Between NH HOTEL and Host Hotels
Can any of the company-specific risk be diversified away by investing in both NH HOTEL 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 NH HOTEL and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and Host Hotels Resorts, you can compare the effects of market volatilities on NH HOTEL 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 NH HOTEL with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and Host Hotels.
Diversification Opportunities for NH HOTEL and Host Hotels
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NH5 and Host is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP 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 NH HOTEL 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 NH HOTEL GROUP 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 NH HOTEL i.e., NH HOTEL and Host Hotels go up and down completely randomly.
Pair Corralation between NH HOTEL and Host Hotels
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to under-perform the Host Hotels. In addition to that, NH HOTEL is 1.17 times more volatile than Host Hotels Resorts. It trades about 0.0 of its total potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.06 per unit of volatility. If you would invest 1,580 in Host Hotels Resorts on August 25, 2024 and sell it today you would earn a total of 40.00 from holding Host Hotels Resorts or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. Host Hotels Resorts
Performance |
| Timeline |
| NH HOTEL GROUP |
| Host Hotels Resorts |
NH HOTEL and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and Host Hotels
The main advantage of trading using opposite NH HOTEL and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL 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.| NH HOTEL vs. The City of | NH HOTEL vs. BORR DRILLING NEW | NH HOTEL vs. Cogent Communications Holdings | NH HOTEL vs. NorAm Drilling AS |
| Host Hotels vs. DELTA AIR LINES | Host Hotels vs. Tower One Wireless | Host Hotels vs. Altair Engineering | Host Hotels vs. 24SEVENOFFICE GROUP AB |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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