Correlation Between FUYO GENERAL and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and Summit Hotel Properties, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Summit Hotel.
Diversification Opportunities for FUYO GENERAL and Summit Hotel
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FUYO and Summit is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE 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 FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and Summit Hotel go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Summit Hotel
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Summit Hotel. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.4 times less risky than Summit Hotel. The stock trades about -0.06 of its potential returns per unit of risk. The Summit Hotel Properties is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 635.00 in Summit Hotel Properties on October 30, 2024 and sell it today you would earn a total of 10.00 from holding Summit Hotel Properties or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Summit Hotel Properties
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Summit Hotel Properties |
FUYO GENERAL and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Summit Hotel
The main advantage of trading using opposite FUYO GENERAL and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. MACOM Technology Solutions | FUYO GENERAL vs. Spirent Communications plc | FUYO GENERAL vs. Easy Software AG | FUYO GENERAL vs. CLEAN ENERGY FUELS |
| Summit Hotel vs. URBAN OUTFITTERS | Summit Hotel vs. SILVER BULLET DATA | Summit Hotel vs. Northern Data AG | Summit Hotel vs. JAPAN TOBACCO UNSPADR12 |
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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