Correlation Between MOBILE FACTORY and Host Hotels

Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and Host 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 MOBILE FACTORY and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOBILE FACTORY INC and Host Hotels Resorts, you can compare the effects of market volatilities on MOBILE FACTORY and Host 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 MOBILE FACTORY with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and Host Hotels.

Diversification Opportunities for MOBILE FACTORY and Host Hotels

-0.4

Correlation Coefficient

MOBILE FACTORY  Host Hotels

Very good diversification

The 3 months correlation between MOBILE and Host is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and MOBILE FACTORY 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 MOBILE FACTORY INC are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and Host Hotels go up and down completely randomly.

Pair Corralation between MOBILE FACTORY and Host Hotels

Assuming the 90 days horizon MOBILE FACTORY INC is expected to under-perform the Host Hotels. But the stock apears to be less risky and, when comparing its historical volatility, MOBILE FACTORY INC is 1.81 times less risky than Host Hotels. The stock trades about -0.04 of its potential returns per unit of risk. The Host Hotels Resorts is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,155  in Host Hotels Resorts on April 20, 2025 and sell it today you would earn a total of  215.00  from holding Host Hotels Resorts or generate 18.61% return on investment over 90 days.

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

MOBILE FACTORY INC  vs.  Host Hotels Resorts

MOBILE FACTORY INC

Risk-Adjusted Performance

Very Weak

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

Host Hotels Resorts

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Host Hotels Resorts are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Host Hotels reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOBILE FACTORY and Host Hotels

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

The idea behind MOBILE FACTORY INC and Host Hotels Resorts 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.