Correlation Between Suntory Beverage and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Summit Hotel Properties, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Summit Hotel.
Diversification Opportunities for Suntory Beverage and Summit Hotel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Suntory and Summit is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food 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 Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and Summit Hotel go up and down completely randomly.
Pair Corralation between Suntory Beverage and Summit Hotel
Assuming the 90 days horizon Suntory Beverage is expected to generate 1.85 times less return on investment than Summit Hotel. But when comparing it to its historical volatility, Suntory Beverage Food is 1.47 times less risky than Summit Hotel. It trades about 0.15 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 552.00 in Summit Hotel Properties on September 3, 2024 and sell it today you would earn a total of 58.00 from holding Summit Hotel Properties or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Summit Hotel Properties
Performance |
| Timeline |
| Suntory Beverage Food |
| Summit Hotel Properties |
Suntory Beverage and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Summit Hotel
The main advantage of trading using opposite Suntory Beverage and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. Sporttotal AG | Suntory Beverage vs. PARKEN Sport Entertainment | Suntory Beverage vs. USWE SPORTS AB | Suntory Beverage vs. EPSILON HEALTHCARE LTD |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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