Correlation Between ANT and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both ANT 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 ANT and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and Sunstone Hotel Investors, you can compare the effects of market volatilities on ANT 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 ANT with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Sunstone Hotel.
Diversification Opportunities for ANT and Sunstone Hotel
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANT and Sunstone is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ANT 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 ANT 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 ANT 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 ANT i.e., ANT and Sunstone Hotel go up and down completely randomly.
Pair Corralation between ANT and Sunstone Hotel
Assuming the 90 days trading horizon ANT is expected to generate 16.17 times more return on investment than Sunstone Hotel. However, ANT is 16.17 times more volatile than Sunstone Hotel Investors. It trades about 0.09 of its potential returns per unit of risk. Sunstone Hotel Investors is currently generating about -0.08 per unit of risk. If you would invest 147.00 in ANT on October 20, 2024 and sell it today you would earn a total of 0.00 from holding ANT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
ANT vs. Sunstone Hotel Investors
Performance |
| Timeline |
| ANT |
| Sunstone Hotel Investors |
ANT and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and Sunstone Hotel
The main advantage of trading using opposite ANT and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT 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 ANT 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. RLJ Lodging Trust | Sunstone Hotel vs. Pebblebrook Hotel Trust | Sunstone Hotel vs. Summit Hotel Properties | Sunstone Hotel vs. Ryman Hospitality Properties |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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