Correlation Between Xenia Hotels and CEOTRONICS
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS, you can compare the effects of market volatilities on Xenia Hotels and CEOTRONICS 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 CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and CEOTRONICS.
Diversification Opportunities for Xenia Hotels and CEOTRONICS
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xenia and CEOTRONICS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS 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 CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and CEOTRONICS go up and down completely randomly.
Pair Corralation between Xenia Hotels and CEOTRONICS
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 2.32 times less return on investment than CEOTRONICS. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.44 times less risky than CEOTRONICS. It trades about 0.11 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 501.00 in CEOTRONICS on September 4, 2024 and sell it today you would earn a total of 204.00 from holding CEOTRONICS or generate 40.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Xenia Hotels Resorts vs. CEOTRONICS
Performance |
Timeline |
Xenia Hotels Resorts |
CEOTRONICS |
Xenia Hotels and CEOTRONICS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xenia Hotels and CEOTRONICS
The main advantage of trading using opposite Xenia Hotels and CEOTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, CEOTRONICS 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 CEOTRONICS will offset losses from the drop in CEOTRONICS's long position.Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Ryman Hospitality Properties | Xenia Hotels vs. Park Hotels Resorts | Xenia Hotels vs. Pebblebrook Hotel Trust |
CEOTRONICS vs. Automatic Data Processing | CEOTRONICS vs. PUBLIC STORAGE PRFO | CEOTRONICS vs. SBA Communications Corp | CEOTRONICS vs. COMBA TELECOM SYST |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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