Correlation Between ANGLO ASIAN and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN 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 ANGLO ASIAN and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and Sunstone Hotel Investors, you can compare the effects of market volatilities on ANGLO ASIAN 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 ANGLO ASIAN with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and Sunstone Hotel.
Diversification Opportunities for ANGLO ASIAN and Sunstone Hotel
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANGLO and Sunstone is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING 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 ANGLO ASIAN 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 ANGLO ASIAN MINING 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 ANGLO ASIAN i.e., ANGLO ASIAN and Sunstone Hotel go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and Sunstone Hotel
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 2.7 times more return on investment than Sunstone Hotel. However, ANGLO ASIAN is 2.7 times more volatile than Sunstone Hotel Investors. It trades about 0.02 of its potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.03 per unit of risk. If you would invest 130.00 in ANGLO ASIAN MINING on October 16, 2024 and sell it today you would lose (6.00) from holding ANGLO ASIAN MINING or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. Sunstone Hotel Investors
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| Sunstone Hotel Investors |
ANGLO ASIAN and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and Sunstone Hotel
The main advantage of trading using opposite ANGLO ASIAN and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN 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.| ANGLO ASIAN vs. Ameriprise Financial | ANGLO ASIAN vs. NEWELL RUBBERMAID | ANGLO ASIAN vs. United Insurance Holdings | ANGLO ASIAN vs. SUN LIFE FINANCIAL |
| Sunstone Hotel vs. ANGLO ASIAN MINING | Sunstone Hotel vs. Perseus Mining Limited | Sunstone Hotel vs. AIR PRODCHEMICALS | Sunstone Hotel vs. SEKISUI CHEMICAL |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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