Correlation Between Siamgas and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Siamgas and Sunstone 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 Siamgas and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siamgas And Petrochemicals and Sunstone Hotel Investors, you can compare the effects of market volatilities on Siamgas and Sunstone 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 Siamgas with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and Sunstone Hotel.
Diversification Opportunities for Siamgas and Sunstone Hotel
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Siamgas and Sunstone is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and Sunstone Hotel Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunstone Hotel Investors and Siamgas 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 Siamgas And Petrochemicals are associated (or correlated) with Sunstone Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunstone Hotel Investors has no effect on the direction of Siamgas i.e., Siamgas and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Siamgas and Sunstone Hotel
Assuming the 90 days trading horizon Siamgas is expected to generate 8.41 times less return on investment than Sunstone Hotel. In addition to that, Siamgas is 1.47 times more volatile than Sunstone Hotel Investors. It trades about 0.01 of its total potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.18 per unit of volatility. If you would invest 925.00 in Sunstone Hotel Investors on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Sunstone Hotel Investors or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siamgas And Petrochemicals vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Siamgas And Petroche |
| Sunstone Hotel Investors |
Siamgas and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and Sunstone Hotel
The main advantage of trading using opposite Siamgas and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, Sunstone 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 Sunstone Hotel will offset losses from the drop in Sunstone Hotel's long position.The idea behind Siamgas And Petrochemicals and Sunstone Hotel Investors 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.| Sunstone Hotel vs. Federal Agricultural Mortgage | Sunstone Hotel vs. THAI BEVERAGE | Sunstone Hotel vs. Monster Beverage Corp | Sunstone Hotel vs. Australian Agricultural |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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