Correlation Between AMREP and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both AMREP 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 AMREP and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMREP and Summit Hotel Properties, you can compare the effects of market volatilities on AMREP 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 AMREP with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and Summit Hotel.
Diversification Opportunities for AMREP and Summit Hotel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMREP and Summit is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding AMREP 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 AMREP 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 AMREP 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 AMREP i.e., AMREP and Summit Hotel go up and down completely randomly.
Pair Corralation between AMREP and Summit Hotel
Considering the 90-day investment horizon AMREP is expected to generate 1.98 times more return on investment than Summit Hotel. However, AMREP is 1.98 times more volatile than Summit Hotel Properties. It trades about 0.19 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.08 per unit of risk. If you would invest 2,990 in AMREP on August 31, 2024 and sell it today you would earn a total of 550.00 from holding AMREP or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMREP vs. Summit Hotel Properties
Performance |
| Timeline |
| AMREP |
| Summit Hotel Properties |
AMREP and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMREP and Summit Hotel
The main advantage of trading using opposite AMREP and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP 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.| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
| Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Xenia Hotels Resorts |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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