Correlation Between Host Hotels and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Host Hotels and G5 Entertainment 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 Host Hotels and G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and G5 Entertainment AB, you can compare the effects of market volatilities on Host Hotels and G5 Entertainment 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 Host Hotels with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and G5 Entertainment.
Diversification Opportunities for Host Hotels and G5 Entertainment
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Host and 0QUS is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment and Host 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 Host Hotels Resorts are associated (or correlated) with G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of Host Hotels i.e., Host Hotels and G5 Entertainment go up and down completely randomly.
Pair Corralation between Host Hotels and G5 Entertainment
Assuming the 90 days trading horizon Host Hotels Resorts is expected to under-perform the G5 Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 1.72 times less risky than G5 Entertainment. The stock trades about -0.22 of its potential returns per unit of risk. The G5 Entertainment AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10,940 in G5 Entertainment AB on December 29, 2024 and sell it today you would earn a total of 1,660 from holding G5 Entertainment AB or generate 15.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Host Hotels Resorts vs. G5 Entertainment AB
Performance |
Timeline |
Host Hotels Resorts |
G5 Entertainment |
Host Hotels and G5 Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Host Hotels and G5 Entertainment
The main advantage of trading using opposite Host Hotels and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.Host Hotels vs. Southwest Airlines Co | Host Hotels vs. Liechtensteinische Landesbank AG | Host Hotels vs. Trainline Plc | Host Hotels vs. International Consolidated Airlines |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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