Correlation Between Host Hotels and METISA Metalrgica

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

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

Diversification Opportunities for Host Hotels and METISA Metalrgica

0.52

Correlation Coefficient

Host Hotels  METISA Metalrgica

Very weak diversification

The 3 months correlation between Host and METISA is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts, and METISA Metalrgica Timboense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METISA Metalrgica and Host 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 Host Hotels Resorts, are associated (or correlated) with METISA Metalrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METISA Metalrgica has no effect on the direction of Host Hotels i.e., Host Hotels and METISA Metalrgica go up and down completely randomly.

Pair Corralation between Host Hotels and METISA Metalrgica

Assuming the 90 days trading horizon Host Hotels Resorts, is expected to generate 0.77 times more return on investment than METISA Metalrgica. However, Host Hotels Resorts, is 1.3 times less risky than METISA Metalrgica. It trades about 0.18 of its potential returns per unit of risk. METISA Metalrgica Timboense is currently generating about 0.06 per unit of risk. If you would invest  7,682  in Host Hotels Resorts, on April 25, 2025 and sell it today you would earn a total of  1,335  from holding Host Hotels Resorts, or generate 17.38% return on investment over 90 days.

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

Host Hotels Resorts,  vs.  METISA Metalrgica Timboense

Host Hotels Resorts,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Host Hotels Resorts, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Host Hotels sustained solid returns over the last few months and may actually be approaching a breakup point.

METISA Metalrgica

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in METISA Metalrgica Timboense are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, METISA Metalrgica may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Host Hotels and METISA Metalrgica

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

The idea behind Host Hotels Resorts, and METISA Metalrgica Timboense 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..