Correlation Between ASML Holding and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both ASML Holding 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 ASML Holding and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML Holding NV and Summit Hotel Properties, you can compare the effects of market volatilities on ASML Holding 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 ASML Holding with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Summit Hotel.
Diversification Opportunities for ASML Holding and Summit Hotel
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASML and Summit is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV 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 ASML Holding 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 ASML Holding NV 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 ASML Holding i.e., ASML Holding and Summit Hotel go up and down completely randomly.
Pair Corralation between ASML Holding and Summit Hotel
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the Summit Hotel. In addition to that, ASML Holding is 1.6 times more volatile than Summit Hotel Properties. It trades about -0.05 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.05 per unit of volatility. If you would invest 545.00 in Summit Hotel Properties on September 2, 2024 and sell it today you would earn a total of 65.00 from holding Summit Hotel Properties or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Summit Hotel Properties
Performance |
| Timeline |
| ASML Holding NV |
| Summit Hotel Properties |
ASML Holding and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Summit Hotel
The main advantage of trading using opposite ASML Holding and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding 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.| ASML Holding vs. Superior Plus Corp | ASML Holding vs. NMI Holdings | ASML Holding vs. Origin Agritech | ASML Holding vs. SIVERS SEMICONDUCTORS AB |
| Summit Hotel vs. Ubisoft Entertainment SA | Summit Hotel vs. Tower One Wireless | Summit Hotel vs. Consolidated Communications Holdings | Summit Hotel vs. Hollywood Bowl Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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