Correlation Between COFCO Joycome and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Summit Hotel 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 COFCO Joycome and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Summit Hotel Properties, you can compare the effects of market volatilities on COFCO Joycome and Summit Hotel 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 COFCO Joycome with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Summit Hotel.
Diversification Opportunities for COFCO Joycome and Summit Hotel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between COFCO and Summit is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Summit Hotel go up and down completely randomly.
Pair Corralation between COFCO Joycome and Summit Hotel
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Summit Hotel. In addition to that, COFCO Joycome is 1.56 times more volatile than Summit Hotel Properties. It trades about -0.05 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.21 per unit of volatility. If you would invest 543.00 in Summit Hotel Properties on September 1, 2024 and sell it today you would earn a total of 67.00 from holding Summit Hotel Properties or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Summit Hotel Properties
Performance |
| Timeline |
| COFCO Joycome Foods |
| Summit Hotel Properties |
COFCO Joycome and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Summit Hotel
The main advantage of trading using opposite COFCO Joycome and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| COFCO Joycome vs. Danone SA | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. NMI Holdings | COFCO Joycome vs. Origin Agritech |
| Summit Hotel vs. PennantPark Investment | Summit Hotel vs. Strategic Investments AS | Summit Hotel vs. HK Electric Investments | Summit Hotel vs. ELECTRONIC ARTS |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |