Correlation Between Host Hotels and AT S

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

Diversification Opportunities for Host Hotels and AT S

-0.79

Correlation Coefficient

Host Hotels  AT S

Pay attention - limited upside

The 3 months correlation between Host and AUS is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria 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 AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Host Hotels i.e., Host Hotels and AT S go up and down completely randomly.

Pair Corralation between Host Hotels and AT S

Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.39 times more return on investment than AT S. However, Host Hotels Resorts is 2.59 times less risky than AT S. It trades about 0.04 of its potential returns per unit of risk. AT S Austria is currently generating about -0.18 per unit of risk. If you would invest  1,710  in Host Hotels Resorts on September 28, 2024 and sell it today you would earn a total of  20.00  from holding Host Hotels Resorts or generate 1.17% return on investment over 90 days.

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

Host Hotels Resorts  vs.  AT S Austria

Host Hotels Resorts

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Host Hotels Resorts are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Host Hotels may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AT S Austria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AT S Austria 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Host Hotels and AT S

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

The idea behind Host Hotels Resorts and AT S Austria 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.