Correlation Between Pure Storage and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Pure Storage 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 Pure Storage and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and Summit Hotel Properties, you can compare the effects of market volatilities on Pure Storage 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 Pure Storage with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and Summit Hotel.
Diversification Opportunities for Pure Storage and Summit Hotel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pure and Summit is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage 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 Pure Storage 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 Pure Storage 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 Pure Storage i.e., Pure Storage and Summit Hotel go up and down completely randomly.
Pair Corralation between Pure Storage and Summit Hotel
Assuming the 90 days horizon Pure Storage is expected to under-perform the Summit Hotel. In addition to that, Pure Storage is 1.49 times more volatile than Summit Hotel Properties. It trades about -0.02 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.06 per unit of volatility. If you would invest 535.00 in Summit Hotel Properties on September 3, 2024 and sell it today you would earn a total of 75.00 from holding Summit Hotel Properties or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pure Storage vs. Summit Hotel Properties
Performance |
| Timeline |
| Pure Storage |
| Summit Hotel Properties |
Pure Storage and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Storage and Summit Hotel
The main advantage of trading using opposite Pure Storage and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage 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.| Pure Storage vs. Teradata Corp | Pure Storage vs. Superior Plus Corp | Pure Storage vs. NMI Holdings | Pure Storage vs. Origin Agritech |
| Summit Hotel vs. PSI Software AG | Summit Hotel vs. Cogent Communications Holdings | Summit Hotel vs. CyberArk Software | Summit Hotel vs. INTERSHOP Communications Aktiengesellschaft |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |