Correlation Between Fortress Transp and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and Summit Hotel Properties, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Summit Hotel.
Diversification Opportunities for Fortress Transp and Summit Hotel
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fortress and Summit is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra 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 Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and Summit Hotel go up and down completely randomly.
Pair Corralation between Fortress Transp and Summit Hotel
Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 1.56 times more return on investment than Summit Hotel. However, Fortress Transp is 1.56 times more volatile than Summit Hotel Properties. It trades about 0.13 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 8,897 in Fortress Transp Infra on September 13, 2024 and sell it today you would earn a total of 5,051 from holding Fortress Transp Infra or generate 56.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Transp Infra vs. Summit Hotel Properties
Performance |
| Timeline |
| Fortress Transp Infra |
| Summit Hotel Properties |
Fortress Transp and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transp and Summit Hotel
The main advantage of trading using opposite Fortress Transp and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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.| Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Custom Truck One | Fortress Transp vs. Herc Holdings | Fortress Transp vs. Alta Equipment Group |
| Summit Hotel vs. Park Hotels Resorts | Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. Ryman Hospitality Properties | Summit 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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