Correlation Between Host Hotels and Materialise

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

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

Diversification Opportunities for Host Hotels and Materialise

-0.03

Correlation Coefficient

Host Hotels  Materialise

Good diversification

The 3 months correlation between Host and Materialise is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Host 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 Host Hotels Resorts are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Host Hotels i.e., Host Hotels and Materialise go up and down completely randomly.

Pair Corralation between Host Hotels and Materialise

Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.48 times more return on investment than Materialise. However, Host Hotels Resorts is 2.1 times less risky than Materialise. It trades about 0.02 of its potential returns per unit of risk. Materialise NV is currently generating about -0.01 per unit of risk. If you would invest  1,367  in Host Hotels Resorts on December 2, 2024 and sell it today you would earn a total of  153.00  from holding Host Hotels Resorts or generate 11.19% return on investment over 90 days.

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

Host Hotels Resorts  vs.  Materialise NV

Host Hotels Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Host 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 basic 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.

Materialise NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Materialise NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Host Hotels and Materialise

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

The idea behind Host Hotels Resorts and Materialise NV 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.