Correlation Between MOLSON RS and Host Hotels
Can any of the company-specific risk be diversified away by investing in both MOLSON RS 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 MOLSON RS and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOLSON RS BEVERAGE and Host Hotels Resorts, you can compare the effects of market volatilities on MOLSON RS 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 MOLSON RS with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOLSON RS and Host Hotels.
Diversification Opportunities for MOLSON RS and Host Hotels
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOLSON and Host is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE 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 MOLSON RS 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 MOLSON RS BEVERAGE 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 MOLSON RS i.e., MOLSON RS and Host Hotels go up and down completely randomly.
Pair Corralation between MOLSON RS and Host Hotels
Assuming the 90 days trading horizon MOLSON RS is expected to generate 2.56 times less return on investment than Host Hotels. In addition to that, MOLSON RS is 1.03 times more volatile than Host Hotels Resorts. It trades about 0.06 of its total potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.16 per unit of volatility. If you would invest 1,670 in Host Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 80.00 from holding Host Hotels Resorts or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOLSON RS BEVERAGE vs. Host Hotels Resorts
Performance |
| Timeline |
| MOLSON RS BEVERAGE |
| Host Hotels Resorts |
MOLSON RS and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOLSON RS and Host Hotels
The main advantage of trading using opposite MOLSON RS and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON RS 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.| MOLSON RS vs. China Resources Beer | MOLSON RS vs. Superior Plus Corp | MOLSON RS vs. SIVERS SEMICONDUCTORS AB | MOLSON RS vs. NorAm Drilling AS |
| Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. Xenia Hotels Resorts | Host Hotels vs. Summit Hotel Properties | 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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