Correlation Between Synthomer Plc and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc 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 Synthomer Plc and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Host Hotels Resorts, you can compare the effects of market volatilities on Synthomer Plc 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 Synthomer Plc with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Host Hotels.
Diversification Opportunities for Synthomer Plc and Host Hotels
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synthomer and Host is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc 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 Synthomer Plc 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 Synthomer plc 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 Synthomer Plc i.e., Synthomer Plc and Host Hotels go up and down completely randomly.
Pair Corralation between Synthomer Plc and Host Hotels
Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the Host Hotels. In addition to that, Synthomer Plc is 2.03 times more volatile than Host Hotels Resorts. It trades about -0.07 of its total potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.03 per unit of volatility. If you would invest 1,606 in Host Hotels Resorts on September 5, 2024 and sell it today you would earn a total of 259.00 from holding Host Hotels Resorts or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.59% |
| Values | Daily Returns |
Synthomer plc vs. Host Hotels Resorts
Performance |
| Timeline |
| Synthomer plc |
| Host Hotels Resorts |
Synthomer Plc and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Host Hotels
The main advantage of trading using opposite Synthomer Plc and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc 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.| Synthomer Plc vs. Givaudan SA | Synthomer Plc vs. Antofagasta PLC | Synthomer Plc vs. Ferrexpo PLC | Synthomer Plc vs. Atalaya Mining |
| Host Hotels vs. International Biotechnology Trust | Host Hotels vs. Sabien Technology Group | Host Hotels vs. CNH Industrial NV | Host Hotels vs. Silvercorp Metals |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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