Correlation Between Xenia Hotels and Meta Financial

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

Diversification Opportunities for Xenia Hotels and Meta Financial

0.27

Correlation Coefficient

Xenia Hotels  Meta Financial

Modest diversification

The 3 months correlation between Xenia and Meta is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group 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 Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Meta Financial go up and down completely randomly.

Pair Corralation between Xenia Hotels and Meta Financial

Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 1.29 times more return on investment than Meta Financial. However, Xenia Hotels is 1.29 times more volatile than Meta Financial Group. It trades about 0.15 of its potential returns per unit of risk. Meta Financial Group is currently generating about -0.02 per unit of risk. If you would invest  900.00  in Xenia Hotels Resorts on April 25, 2025 and sell it today you would earn a total of  180.00  from holding Xenia Hotels Resorts or generate 20.0% return on investment over 90 days.

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

Xenia Hotels Resorts  vs.  Meta Financial Group

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 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Xenia Hotels reported solid returns over the last few months and may actually be approaching a breakup point.

Meta Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meta Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Meta Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Xenia Hotels and Meta Financial

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

The idea behind Xenia Hotels Resorts and Meta Financial Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.