Correlation Between Xenia Hotels and BROADPEAK

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

Diversification Opportunities for Xenia Hotels and BROADPEAK

0.32

Correlation Coefficient

Xenia Hotels  BROADPEAK

Weak diversification

The 3 months correlation between Xenia and BROADPEAK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and BROADPEAK SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADPEAK SA EO 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 BROADPEAK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADPEAK SA EO has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and BROADPEAK go up and down completely randomly.

Pair Corralation between Xenia Hotels and BROADPEAK

Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 0.61 times more return on investment than BROADPEAK. However, Xenia Hotels Resorts is 1.63 times less risky than BROADPEAK. It trades about 0.21 of its potential returns per unit of risk. BROADPEAK SA EO is currently generating about 0.05 per unit of risk. If you would invest  846.00  in Xenia Hotels Resorts on April 20, 2025 and sell it today you would earn a total of  254.00  from holding Xenia Hotels Resorts or generate 30.02% 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.  BROADPEAK SA EO

Xenia Hotels Resorts

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xenia Hotels Resorts are ranked lower than 16 (%) 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.

BROADPEAK SA EO

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BROADPEAK SA EO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BROADPEAK may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Xenia Hotels and BROADPEAK

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

The idea behind Xenia Hotels Resorts and BROADPEAK SA EO 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.