Correlation Between RTW Venture and Host Hotels
Can any of the company-specific risk be diversified away by investing in both RTW Venture 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 RTW Venture and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTW Venture Fund and Host Hotels Resorts, you can compare the effects of market volatilities on RTW Venture 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 RTW Venture with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and Host Hotels.
Diversification Opportunities for RTW Venture and Host Hotels
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RTW and Host is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund 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 RTW Venture 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 RTW Venture Fund 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 RTW Venture i.e., RTW Venture and Host Hotels go up and down completely randomly.
Pair Corralation between RTW Venture and Host Hotels
Assuming the 90 days trading horizon RTW Venture is expected to generate 1.1 times less return on investment than Host Hotels. But when comparing it to its historical volatility, RTW Venture Fund is 1.08 times less risky than Host Hotels. It trades about 0.03 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,654 in Host Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 255.00 from holding Host Hotels Resorts or generate 15.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
RTW Venture Fund vs. Host Hotels Resorts
Performance |
| Timeline |
| RTW Venture Fund |
| Host Hotels Resorts |
RTW Venture and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTW Venture and Host Hotels
The main advantage of trading using opposite RTW Venture and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTW Venture 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.| RTW Venture vs. Hong Kong Land | RTW Venture vs. Neometals | RTW Venture vs. Coor Service Management | RTW Venture vs. Fidelity Sustainable USD |
| Host Hotels vs. Hong Kong Land | Host Hotels vs. Neometals | Host Hotels vs. Coor Service Management | Host Hotels vs. Fidelity Sustainable USD |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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