Correlation Between Xenia Hotels and GLOBUS MEDICAL
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and GLOBUS MEDICAL 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 GLOBUS MEDICAL 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 GLOBUS MEDICAL A, you can compare the effects of market volatilities on Xenia Hotels and GLOBUS MEDICAL 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 GLOBUS MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and GLOBUS MEDICAL.
Diversification Opportunities for Xenia Hotels and GLOBUS MEDICAL
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xenia and GLOBUS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A 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 GLOBUS MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and GLOBUS MEDICAL go up and down completely randomly.
Pair Corralation between Xenia Hotels and GLOBUS MEDICAL
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 1.54 times more return on investment than GLOBUS MEDICAL. However, Xenia Hotels is 1.54 times more volatile than GLOBUS MEDICAL A. It trades about 0.01 of its potential returns per unit of risk. GLOBUS MEDICAL A is currently generating about -0.1 per unit of risk. If you would invest 1,420 in Xenia Hotels Resorts on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Xenia Hotels Resorts or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Xenia Hotels Resorts vs. GLOBUS MEDICAL A
Performance |
Timeline |
Xenia Hotels Resorts |
GLOBUS MEDICAL A |
Xenia Hotels and GLOBUS MEDICAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xenia Hotels and GLOBUS MEDICAL
The main advantage of trading using opposite Xenia Hotels and GLOBUS MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, GLOBUS MEDICAL 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 GLOBUS MEDICAL will offset losses from the drop in GLOBUS MEDICAL's long position.Xenia Hotels vs. Hemisphere Energy Corp | Xenia Hotels vs. PARKEN Sport Entertainment | Xenia Hotels vs. Flutter Entertainment PLC | Xenia Hotels vs. Spirent Communications plc |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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