Correlation Between Host Hotels and Apple Hospitality

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

Diversification Opportunities for Host Hotels and Apple Hospitality

0.66

Correlation Coefficient

Host Hotels  Apple Hospitality

Poor diversification

The 3 months correlation between Host and Apple is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Apple Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Hospitality REIT 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 Apple Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Hospitality REIT has no effect on the direction of Host Hotels i.e., Host Hotels and Apple Hospitality go up and down completely randomly.

Pair Corralation between Host Hotels and Apple Hospitality

Considering the 90-day investment horizon Host Hotels Resorts is expected to generate 0.96 times more return on investment than Apple Hospitality. However, Host Hotels Resorts is 1.04 times less risky than Apple Hospitality. It trades about 0.03 of its potential returns per unit of risk. Apple Hospitality REIT is currently generating about -0.04 per unit of risk. If you would invest  1,590  in Host Hotels Resorts on July 20, 2025 and sell it today you would earn a total of  38.00  from holding Host Hotels Resorts or generate 2.39% return on investment over 90 days.

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

Host Hotels Resorts  vs.  Apple Hospitality REIT

Host Hotels Resorts

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Host Hotels Resorts are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Host Hotels is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Apple Hospitality REIT

Risk-Adjusted Performance

Weakest

Over the last 90 days Apple Hospitality REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Apple Hospitality is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Host Hotels and Apple Hospitality

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

The idea behind Host Hotels Resorts and Apple Hospitality REIT 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.