Correlation Between Xenia Hotels and IA FINANCIAL

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

Diversification Opportunities for Xenia Hotels and IA FINANCIAL

0.62

Correlation Coefficient

Xenia Hotels  IA FINANCIAL

Poor diversification

The 3 months correlation between Xenia and 1OD is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and IA FINANCIAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA FINANCIAL P 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 IA FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA FINANCIAL P has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and IA FINANCIAL go up and down completely randomly.

Pair Corralation between Xenia Hotels and IA FINANCIAL

Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to under-perform the IA FINANCIAL. But the stock apears to be less risky and, when comparing its historical volatility, Xenia Hotels Resorts is 1.06 times less risky than IA FINANCIAL. The stock trades about -0.17 of its potential returns per unit of risk. The IA FINANCIAL P is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,692  in IA FINANCIAL P on December 28, 2024 and sell it today you would earn a total of  158.00  from holding IA FINANCIAL P or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Xenia Hotels Resorts  vs.  IA FINANCIAL P

Xenia Hotels Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xenia Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

IA FINANCIAL P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IA FINANCIAL P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IA FINANCIAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Xenia Hotels and IA FINANCIAL

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

The idea behind Xenia Hotels Resorts and IA FINANCIAL P 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.