Correlation Between Hanison Construction and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Hanison Construction 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 Hanison Construction and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanison Construction Holdings and Summit Hotel Properties, you can compare the effects of market volatilities on Hanison Construction 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 Hanison Construction with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and Summit Hotel.
Diversification Opportunities for Hanison Construction and Summit Hotel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanison and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanison Construction Holdings 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 Hanison Construction 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 Hanison Construction Holdings 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 Hanison Construction i.e., Hanison Construction and Summit Hotel go up and down completely randomly.
Pair Corralation between Hanison Construction and Summit Hotel
If you would invest 574.00 in Summit Hotel Properties on September 20, 2024 and sell it today you would earn a total of 76.00 from holding Summit Hotel Properties or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanison Construction Holdings vs. Summit Hotel Properties
Performance |
| Timeline |
| Hanison Construction |
| Summit Hotel Properties |
Hanison Construction and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanison Construction and Summit Hotel
The main advantage of trading using opposite Hanison Construction and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanison Construction 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.| Hanison Construction vs. Commercial Vehicle Group | Hanison Construction vs. Ribbon Communications | Hanison Construction vs. Carsales | Hanison Construction vs. Zoom Video Communications |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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