Correlation Between Host Hotels and ABO-GROUP ENVIRONMENT

Can any of the company-specific risk be diversified away by investing in both Host Hotels and ABO-GROUP ENVIRONMENT 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 ABO-GROUP ENVIRONMENT 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 ABO GROUP ENVIRONMENT, you can compare the effects of market volatilities on Host Hotels and ABO-GROUP ENVIRONMENT 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 ABO-GROUP ENVIRONMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and ABO-GROUP ENVIRONMENT.

Diversification Opportunities for Host Hotels and ABO-GROUP ENVIRONMENT

-0.86

Correlation Coefficient

Host Hotels  ABO-GROUP ENVIRONMENT

Pay attention - limited upside

The 3 months correlation between Host and ABO-GROUP is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and ABO GROUP ENVIRONMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABO GROUP ENVIRONMENT 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 ABO-GROUP ENVIRONMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABO GROUP ENVIRONMENT has no effect on the direction of Host Hotels i.e., Host Hotels and ABO-GROUP ENVIRONMENT go up and down completely randomly.

Pair Corralation between Host Hotels and ABO-GROUP ENVIRONMENT

Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.87 times more return on investment than ABO-GROUP ENVIRONMENT. However, Host Hotels Resorts is 1.15 times less risky than ABO-GROUP ENVIRONMENT. It trades about 0.04 of its potential returns per unit of risk. ABO GROUP ENVIRONMENT is currently generating about -0.01 per unit of risk. If you would invest  1,433  in Host Hotels Resorts on October 6, 2024 and sell it today you would earn a total of  227.00  from holding Host Hotels Resorts or generate 15.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.68%
Values	Daily Returns

Host Hotels Resorts  vs.  ABO GROUP ENVIRONMENT

Host Hotels Resorts

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Host Hotels Resorts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Host Hotels is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ABO GROUP ENVIRONMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABO GROUP ENVIRONMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Host Hotels and ABO-GROUP ENVIRONMENT

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

The idea behind Host Hotels Resorts and ABO GROUP ENVIRONMENT 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.