Correlation Between Xenia Hotels and NORTH MEDIA

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

Diversification Opportunities for Xenia Hotels and NORTH MEDIA

0.8

Correlation Coefficient

Xenia Hotels  NORTH MEDIA

Very poor diversification

The 3 months correlation between Xenia and NORTH is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and NORTH MEDIA AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTH MEDIA AS 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 NORTH MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTH MEDIA AS has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and NORTH MEDIA go up and down completely randomly.

Pair Corralation between Xenia Hotels and NORTH MEDIA

Assuming the 90 days trading horizon Xenia Hotels is expected to generate 1.0 times less return on investment than NORTH MEDIA. In addition to that, Xenia Hotels is 1.08 times more volatile than NORTH MEDIA AS. It trades about 0.2 of its total potential returns per unit of risk. NORTH MEDIA AS is currently generating about 0.22 per unit of volatility. If you would invest  455.00  in NORTH MEDIA AS on April 20, 2025 and sell it today you would earn a total of  135.00  from holding NORTH MEDIA AS or generate 29.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Xenia Hotels Resorts  vs.  NORTH MEDIA AS

Xenia Hotels Resorts

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xenia Hotels Resorts are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Xenia Hotels reported solid returns over the last few months and may actually be approaching a breakup point.

NORTH MEDIA AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NORTH MEDIA AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NORTH MEDIA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xenia Hotels and NORTH MEDIA

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

The idea behind Xenia Hotels Resorts and NORTH MEDIA AS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.