Correlation Between Xenia Hotels and CITIC DAMENG

Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and CITIC DAMENG 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 CITIC DAMENG 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 CITIC DAMENG, you can compare the effects of market volatilities on Xenia Hotels and CITIC DAMENG 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 CITIC DAMENG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and CITIC DAMENG.

Diversification Opportunities for Xenia Hotels and CITIC DAMENG

0.0

Correlation Coefficient

Xenia Hotels  CITIC DAMENG

Pay attention - limited upside

The 3 months correlation between Xenia and CITIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and CITIC DAMENG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC DAMENG 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 CITIC DAMENG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC DAMENG has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and CITIC DAMENG go up and down completely randomly.

Pair Corralation between Xenia Hotels and CITIC DAMENG

If you would invest  1,319  in Xenia Hotels Resorts on October 25, 2024 and sell it today you would earn a total of  91.00  from holding Xenia Hotels Resorts or generate 6.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Xenia Hotels Resorts  vs.  CITIC DAMENG

Xenia Hotels Resorts

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xenia Hotels Resorts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Xenia Hotels may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CITIC DAMENG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIC DAMENG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CITIC DAMENG is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Xenia Hotels and CITIC DAMENG

The main advantage of trading using opposite Xenia Hotels and CITIC DAMENG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, CITIC DAMENG 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 CITIC DAMENG will offset losses from the drop in CITIC DAMENG's long position.

The idea behind Xenia Hotels Resorts and CITIC DAMENG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.