Correlation Between Qingling Motors and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Qingling Motors 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 Qingling Motors and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qingling Motors Co and Host Hotels Resorts, you can compare the effects of market volatilities on Qingling Motors 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 Qingling Motors with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingling Motors and Host Hotels.
Diversification Opportunities for Qingling Motors and Host Hotels
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qingling and Host is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Qingling Motors Co 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 Qingling Motors 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 Qingling Motors Co 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 Qingling Motors i.e., Qingling Motors and Host Hotels go up and down completely randomly.
Pair Corralation between Qingling Motors and Host Hotels
Assuming the 90 days horizon Qingling Motors Co is expected to generate 1.8 times more return on investment than Host Hotels. However, Qingling Motors is 1.8 times more volatile than Host Hotels Resorts. It trades about 0.24 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.18 per unit of risk. If you would invest 5.60 in Qingling Motors Co on September 15, 2024 and sell it today you would earn a total of 0.76 from holding Qingling Motors Co or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingling Motors Co vs. Host Hotels Resorts
Performance |
| Timeline |
| Qingling Motors |
| Host Hotels Resorts |
Qingling Motors and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingling Motors and Host Hotels
The main advantage of trading using opposite Qingling Motors and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingling Motors 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.| Qingling Motors vs. Heidelberg Materials AG | Qingling Motors vs. Host Hotels Resorts | Qingling Motors vs. Compagnie Plastic Omnium | Qingling Motors vs. INTERCONT HOTELS |
| Host Hotels vs. Fast Retailing Co | Host Hotels vs. TRADEDOUBLER AB SK | Host Hotels vs. Carsales | Host Hotels vs. bet at home AG |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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