Correlation Between Britvic Plc and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Britvic Plc 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 Britvic Plc and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Britvic plc and Sunstone Hotel Investors, you can compare the effects of market volatilities on Britvic Plc 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 Britvic Plc with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Britvic Plc and Sunstone Hotel.
Diversification Opportunities for Britvic Plc and Sunstone Hotel
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Britvic and Sunstone is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Britvic plc 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 Britvic Plc 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 Britvic plc 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 Britvic Plc i.e., Britvic Plc and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Britvic Plc and Sunstone Hotel
Assuming the 90 days horizon Britvic plc is expected to generate 1.12 times more return on investment than Sunstone Hotel. However, Britvic Plc is 1.12 times more volatile than Sunstone Hotel Investors. It trades about 0.08 of its potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.06 per unit of risk. If you would invest 979.00 in Britvic plc on September 12, 2024 and sell it today you would earn a total of 551.00 from holding Britvic plc or generate 56.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Britvic plc vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Britvic plc |
| Sunstone Hotel Investors |
Britvic Plc and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Britvic Plc and Sunstone Hotel
The main advantage of trading using opposite Britvic Plc and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Britvic Plc 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.| Britvic Plc vs. Sunstone Hotel Investors | Britvic Plc vs. INTERCONT HOTELS | Britvic Plc vs. Xenia Hotels Resorts | Britvic Plc vs. ADRIATIC METALS LS 013355 |
| Sunstone Hotel vs. Host Hotels Resorts | Sunstone Hotel vs. Xenia Hotels Resorts | Sunstone Hotel vs. Summit Hotel Properties | Sunstone Hotel vs. ASHFORD HOSPITTRUST |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |