Correlation Between Vienna Insurance and Host Hotels

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

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

Diversification Opportunities for Vienna Insurance and Host Hotels

0.79

Correlation Coefficient

Vienna Insurance  Host Hotels

Poor diversification

The 3 months correlation between Vienna and Host is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group 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 Vienna Insurance 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 Vienna Insurance Group 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 Vienna Insurance i.e., Vienna Insurance and Host Hotels go up and down completely randomly.

Pair Corralation between Vienna Insurance and Host Hotels

Assuming the 90 days trading horizon Vienna Insurance is expected to generate 1.1 times less return on investment than Host Hotels. But when comparing it to its historical volatility, Vienna Insurance Group is 1.59 times less risky than Host Hotels. It trades about 0.17 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,155  in Host Hotels Resorts on April 22, 2025 and sell it today you would earn a total of  185.00  from holding Host Hotels Resorts or generate 16.02% return on investment over 90 days.

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

Vienna Insurance Group  vs.  Host Hotels Resorts

Vienna Insurance

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vienna Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

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 9 (%) 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 Vienna Insurance and Host Hotels

The main advantage of trading using opposite Vienna Insurance and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance 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 Vienna Insurance Group 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.