Correlation Between SMA Solar and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Xenia Hotels Resorts, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Xenia Hotels.
Diversification Opportunities for SMA Solar and Xenia Hotels
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and Xenia is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology 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 SMA Solar 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 SMA Solar Technology 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 SMA Solar i.e., SMA Solar and Xenia Hotels go up and down completely randomly.
Pair Corralation between SMA Solar and Xenia Hotels
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Xenia Hotels. In addition to that, SMA Solar is 2.19 times more volatile than Xenia Hotels Resorts. It trades about -0.18 of its total potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.03 per unit of volatility. If you would invest 1,345 in Xenia Hotels Resorts on September 3, 2024 and sell it today you would earn a total of 85.00 from holding Xenia Hotels Resorts or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Xenia Hotels Resorts
Performance |
| Timeline |
| SMA Solar Technology |
| Xenia Hotels Resorts |
SMA Solar and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Xenia Hotels
The main advantage of trading using opposite SMA Solar and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.| SMA Solar vs. Superior Plus Corp | SMA Solar vs. NMI Holdings | SMA Solar vs. Origin Agritech | SMA Solar vs. SIVERS SEMICONDUCTORS AB |
| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Ryman Hospitality Properties | Xenia Hotels vs. Park Hotels Resorts | Xenia Hotels vs. Pebblebrook Hotel Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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