Correlation Between TOREX SEMICONDUCTOR and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOREX SEMICONDUCTOR LTD and Summit Hotel Properties, you can compare the effects of market volatilities on TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOREX SEMICONDUCTOR and Summit Hotel.
Diversification Opportunities for TOREX SEMICONDUCTOR and Summit Hotel
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TOREX and Summit is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding TOREX SEMICONDUCTOR LTD 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 TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR LTD 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 TOREX SEMICONDUCTOR i.e., TOREX SEMICONDUCTOR and Summit Hotel go up and down completely randomly.
Pair Corralation between TOREX SEMICONDUCTOR and Summit Hotel
Assuming the 90 days horizon TOREX SEMICONDUCTOR LTD is expected to under-perform the Summit Hotel. In addition to that, TOREX SEMICONDUCTOR is 1.2 times more volatile than Summit Hotel Properties. It trades about -0.06 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.02 per unit of volatility. If you would invest 613.00 in Summit Hotel Properties on September 14, 2024 and sell it today you would earn a total of 32.00 from holding Summit Hotel Properties or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOREX SEMICONDUCTOR LTD vs. Summit Hotel Properties
Performance |
| Timeline |
| TOREX SEMICONDUCTOR LTD |
| Summit Hotel Properties |
TOREX SEMICONDUCTOR and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOREX SEMICONDUCTOR and Summit Hotel
The main advantage of trading using opposite TOREX SEMICONDUCTOR and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOREX SEMICONDUCTOR 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.| TOREX SEMICONDUCTOR vs. Carsales | TOREX SEMICONDUCTOR vs. Cal Maine Foods | TOREX SEMICONDUCTOR vs. National Beverage Corp | TOREX SEMICONDUCTOR vs. Collins Foods Limited |
| Summit Hotel vs. NORWEGIAN AIR SHUT | Summit Hotel vs. TOREX SEMICONDUCTOR LTD | Summit Hotel vs. Ryanair Holdings plc | Summit Hotel vs. Magnachip Semiconductor |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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