Correlation Between Park Hotels and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Park Hotels 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 Park Hotels and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Hotels Resorts and Sunstone Hotel Investors, you can compare the effects of market volatilities on Park Hotels 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 Park Hotels with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Sunstone Hotel.
Diversification Opportunities for Park Hotels and Sunstone Hotel
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Park and Sunstone is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts 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 Park Hotels 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 Park Hotels Resorts 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 Park Hotels i.e., Park Hotels and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Park Hotels and Sunstone Hotel
Assuming the 90 days trading horizon Park Hotels Resorts is expected to generate 1.43 times more return on investment than Sunstone Hotel. However, Park Hotels is 1.43 times more volatile than Sunstone Hotel Investors. It trades about 0.05 of its potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.02 per unit of risk. If you would invest 937.00 in Park Hotels Resorts on August 30, 2024 and sell it today you would earn a total of 513.00 from holding Park Hotels Resorts or generate 54.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Park Hotels Resorts |
| Sunstone Hotel Investors |
Park Hotels and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Sunstone Hotel
The main advantage of trading using opposite Park Hotels and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels 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.| Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc |
| Sunstone Hotel vs. MACOM Technology Solutions | Sunstone Hotel vs. COMBA TELECOM SYST | Sunstone Hotel vs. Shenandoah Telecommunications | Sunstone Hotel vs. Wayside Technology Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |