Correlation Between National Retail and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both National Retail and Xenia 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 National Retail and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and Xenia Hotels Resorts, you can compare the effects of market volatilities on National Retail and Xenia 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 National Retail with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Xenia Hotels.
Diversification Opportunities for National Retail and Xenia Hotels
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Xenia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts and National Retail 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 National Retail Properties are associated (or correlated) with Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of National Retail i.e., National Retail and Xenia Hotels go up and down completely randomly.
Pair Corralation between National Retail and Xenia Hotels
Considering the 90-day investment horizon National Retail is expected to generate 2.2 times less return on investment than Xenia Hotels. But when comparing it to its historical volatility, National Retail Properties is 1.56 times less risky than Xenia Hotels. It trades about 0.04 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,214 in Xenia Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 319.00 from holding Xenia Hotels Resorts or generate 26.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. Xenia Hotels Resorts
Performance |
| Timeline |
| National Retail Prop |
| Xenia Hotels Resorts |
National Retail and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Xenia Hotels
The main advantage of trading using opposite National Retail and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, Xenia 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| National Retail vs. Acadia Realty Trust | National Retail vs. Federal Realty Investment | National Retail vs. Realty Income | National Retail vs. Whitestone REIT |
| Xenia Hotels vs. RLJ Lodging Trust | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Pebblebrook Hotel Trust | Xenia Hotels vs. Summit Hotel Properties |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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