Correlation Between Xenia Hotels and Sotherly Hotels
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Sotherly 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 Xenia Hotels and Sotherly Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenia Hotels Resorts and Sotherly Hotels Series, you can compare the effects of market volatilities on Xenia Hotels and Sotherly 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 Xenia Hotels with a short position of Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Sotherly Hotels.
Diversification Opportunities for Xenia Hotels and Sotherly Hotels
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenia and Sotherly is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Sotherly Hotels Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels Series and Xenia 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 Xenia Hotels Resorts are associated (or correlated) with Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels Series has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Sotherly Hotels go up and down completely randomly.
Pair Corralation between Xenia Hotels and Sotherly Hotels
Considering the 90-day investment horizon Xenia Hotels Resorts is expected to generate 1.68 times more return on investment than Sotherly Hotels. However, Xenia Hotels is 1.68 times more volatile than Sotherly Hotels Series. It trades about 0.17 of its potential returns per unit of risk. Sotherly Hotels Series is currently generating about -0.01 per unit of risk. If you would invest 1,320 in Xenia Hotels Resorts on September 8, 2024 and sell it today you would earn a total of 288.00 from holding Xenia Hotels Resorts or generate 21.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xenia Hotels Resorts vs. Sotherly Hotels Series
Performance |
Timeline |
Xenia Hotels Resorts |
Sotherly Hotels Series |
Xenia Hotels and Sotherly Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xenia Hotels and Sotherly Hotels
The main advantage of trading using opposite Xenia Hotels and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Sotherly 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 Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.Xenia Hotels vs. RLJ Lodging Trust | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Pebblebrook Hotel Trust | Xenia Hotels vs. Summit Hotel Properties |
Sotherly Hotels vs. RLJ Lodging Trust | Sotherly Hotels vs. Diamondrock Hospitality | Sotherly Hotels vs. Chatham Lodging Trust | Sotherly Hotels vs. Xenia Hotels Resorts |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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