Correlation Between CALTAGIRONE EDITORE and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CALTAGIRONE EDITORE and Summit Hotel Properties, you can compare the effects of market volatilities on CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CALTAGIRONE EDITORE and Summit Hotel.
Diversification Opportunities for CALTAGIRONE EDITORE and Summit Hotel
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CALTAGIRONE and Summit is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE i.e., CALTAGIRONE EDITORE and Summit Hotel go up and down completely randomly.
Pair Corralation between CALTAGIRONE EDITORE and Summit Hotel
Assuming the 90 days trading horizon CALTAGIRONE EDITORE is expected to generate 3.71 times more return on investment than Summit Hotel. However, CALTAGIRONE EDITORE is 3.71 times more volatile than Summit Hotel Properties. It trades about 0.16 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.01 per unit of risk. If you would invest 132.00 in CALTAGIRONE EDITORE on November 6, 2024 and sell it today you would earn a total of 19.00 from holding CALTAGIRONE EDITORE or generate 14.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
CALTAGIRONE EDITORE vs. Summit Hotel Properties
Performance |
| Timeline |
| CALTAGIRONE EDITORE |
| Summit Hotel Properties |
CALTAGIRONE EDITORE and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CALTAGIRONE EDITORE and Summit Hotel
The main advantage of trading using opposite CALTAGIRONE EDITORE and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CALTAGIRONE EDITORE 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.| CALTAGIRONE EDITORE vs. BRAEMAR HOTELS RES | CALTAGIRONE EDITORE vs. COVIVIO HOTELS INH | CALTAGIRONE EDITORE vs. KENEDIX OFFICE INV | CALTAGIRONE EDITORE vs. NorAm Drilling AS |
| Summit Hotel vs. HOCHSCHILD MINING | Summit Hotel vs. Magic Software Enterprises | Summit Hotel vs. DETALION GAMES SA | Summit Hotel vs. TROPHY GAMES DEV |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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