Correlation Between Armada Hflr and Xenia Hotels

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Xenia 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 Armada Hflr and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armada Hflr Pr and Xenia Hotels Resorts, you can compare the effects of market volatilities on Armada Hflr and Xenia 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 Armada Hflr with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Xenia Hotels.

Diversification Opportunities for Armada Hflr and Xenia Hotels

0.92

Correlation Coefficient

Armada Hflr  Xenia Hotels

Almost no diversification

The 3 months correlation between Armada and Xenia is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of Armada Hflr i.e., Armada Hflr and Xenia Hotels go up and down completely randomly.

Pair Corralation between Armada Hflr and Xenia Hotels

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Xenia Hotels. In addition to that, Armada Hflr is 1.23 times more volatile than Xenia Hotels Resorts. It trades about -0.2 of its total potential returns per unit of risk. Xenia Hotels Resorts is currently generating about -0.18 per unit of volatility. If you would invest  1,497  in Xenia Hotels Resorts on December 27, 2024 and sell it today you would lose (267.00) from holding Xenia Hotels Resorts or give up 17.84% of portfolio value over 90 days.

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

Armada Hflr Pr  vs.  Xenia Hotels Resorts

Armada Hflr Pr

Risk-Adjusted Performance

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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. Even with sluggish performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Armada Hflr and Xenia Hotels

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

The idea behind Armada Hflr Pr and Xenia 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.