Correlation Between Xenia Hotels and Hersha Hospitality
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Hersha Hospitality 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 Xenia Hotels and Hersha Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenia Hotels Resorts and Hersha Hospitality Trust, you can compare the effects of market volatilities on Xenia Hotels and Hersha Hospitality 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 Xenia Hotels with a short position of Hersha Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Hersha Hospitality.
Diversification Opportunities for Xenia Hotels and Hersha Hospitality
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xenia and Hersha is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Hersha Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hersha Hospitality Trust and Xenia Hotels 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 Xenia Hotels Resorts are associated (or correlated) with Hersha Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hersha Hospitality Trust has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Hersha Hospitality go up and down completely randomly.
Pair Corralation between Xenia Hotels and Hersha Hospitality
If you would invest 1,464 in Xenia Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 104.00 from holding Xenia Hotels Resorts or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Hersha Hospitality Trust
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Hersha Hospitality Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xenia Hotels and Hersha Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Hersha Hospitality
The main advantage of trading using opposite Xenia Hotels and Hersha Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Hersha Hospitality 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 Hersha Hospitality will offset losses from the drop in Hersha Hospitality's long position.| Xenia Hotels vs. RLJ Lodging Trust | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Pebblebrook Hotel Trust | Xenia Hotels vs. Summit Hotel Properties |
| Hersha Hospitality vs. RLJ Lodging Trust | Hersha Hospitality vs. Sunstone Hotel Investors | Hersha Hospitality vs. Pebblebrook Hotel Trust | Hersha Hospitality vs. Summit Hotel Properties |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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