Correlation Between Aspen Digital and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Aspen Digital 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 Aspen Digital and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Digital and Sunstone Hotel Investors, you can compare the effects of market volatilities on Aspen Digital 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 Aspen Digital with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Digital and Sunstone Hotel.
Diversification Opportunities for Aspen Digital and Sunstone Hotel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aspen and Sunstone is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Digital 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 Aspen Digital 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 Aspen Digital 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 Aspen Digital i.e., Aspen Digital and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Aspen Digital and Sunstone Hotel
Given the investment horizon of 90 days Aspen Digital is expected to generate 0.36 times more return on investment than Sunstone Hotel. However, Aspen Digital is 2.8 times less risky than Sunstone Hotel. It trades about 0.06 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 335.00 in Aspen Digital on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Aspen Digital or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Digital vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Aspen Digital |
| Sunstone Hotel Investors |
Aspen Digital and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Digital and Sunstone Hotel
The main advantage of trading using opposite Aspen Digital and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Digital 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.| Aspen Digital vs. Copa Holdings SA | Aspen Digital vs. United Airlines Holdings | Aspen Digital vs. Delta Air Lines | Aspen Digital vs. SkyWest |
| Sunstone Hotel vs. Pebblebrook Hotel Trust | Sunstone Hotel vs. DiamondRock Hospitality | Sunstone Hotel vs. Pebblebrook Hotel Trust |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |