Correlation Between VIRGIN WINES and Host Hotels

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Can any of the company-specific risk be diversified away by investing in both VIRGIN WINES and Host Hotels 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 VIRGIN WINES and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIRGIN WINES UK and Host Hotels Resorts, you can compare the effects of market volatilities on VIRGIN WINES and Host Hotels 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 VIRGIN WINES with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRGIN WINES and Host Hotels.

Diversification Opportunities for VIRGIN WINES and Host Hotels

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between VIRGIN WINES and Host Hotels

If you would invest  1,424  in Host Hotels Resorts on October 5, 2024 and sell it today you would earn a total of  236.00  from holding Host Hotels Resorts or generate 16.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

VIRGIN WINES UK  vs.  Host Hotels Resorts

 Performance 
       Timeline  
VIRGIN WINES UK 

Risk-Adjusted Performance

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Over the last 90 days VIRGIN WINES UK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VIRGIN WINES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Host Hotels Resorts 

Risk-Adjusted Performance

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Over the last 90 days Host Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Host Hotels may actually be approaching a critical reversion point that can send shares even higher in February 2025.

VIRGIN WINES and Host Hotels Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with VIRGIN WINES and Host Hotels

The main advantage of trading using opposite VIRGIN WINES and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRGIN WINES position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.
The idea behind VIRGIN WINES UK and Host Hotels Resorts 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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