Correlation Between Neometals and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Neometals 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 Neometals and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neometals and Host Hotels Resorts, you can compare the effects of market volatilities on Neometals 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 Neometals with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neometals and Host Hotels.
Diversification Opportunities for Neometals and Host Hotels
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neometals and Host is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Neometals 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 Neometals 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 Neometals 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 Neometals i.e., Neometals and Host Hotels go up and down completely randomly.
Pair Corralation between Neometals and Host Hotels
Assuming the 90 days trading horizon Neometals is expected to under-perform the Host Hotels. In addition to that, Neometals is 3.77 times more volatile than Host Hotels Resorts. It trades about -0.03 of its total potential returns per unit of risk. Host Hotels Resorts is currently generating about -0.02 per unit of volatility. If you would invest 1,742 in Host Hotels Resorts on November 28, 2024 and sell it today you would lose (143.00) from holding Host Hotels Resorts or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.48% |
| Values | Daily Returns |
Neometals vs. Host Hotels Resorts
Performance |
| Timeline |
| Neometals |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Host Hotels Resorts |
Neometals and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neometals and Host Hotels
The main advantage of trading using opposite Neometals and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals 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.| Neometals vs. Spirent Communications plc | Neometals vs. Litigation Capital Management | Neometals vs. Science in Sport | Neometals vs. Cairo Communication SpA |
| Host Hotels vs. Wheaton Precious Metals | Host Hotels vs. METALL ZUG AG | Host Hotels vs. Resolute Mining Limited | Host Hotels vs. AfriTin Mining |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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