Correlation Between Jacquet Metal and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal 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 Jacquet Metal and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacquet Metal Service and Summit Hotel Properties, you can compare the effects of market volatilities on Jacquet Metal 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 Jacquet Metal with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Summit Hotel.
Diversification Opportunities for Jacquet Metal and Summit Hotel
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jacquet and Summit is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service 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 Jacquet Metal 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 Jacquet Metal Service 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 Jacquet Metal i.e., Jacquet Metal and Summit Hotel go up and down completely randomly.
Pair Corralation between Jacquet Metal and Summit Hotel
Assuming the 90 days horizon Jacquet Metal Service is expected to under-perform the Summit Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 1.68 times less risky than Summit Hotel. The stock trades about -0.05 of its potential returns per unit of risk. The Summit Hotel Properties is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 602.00 in Summit Hotel Properties on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Summit Hotel Properties or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Summit Hotel Properties
Performance |
| Timeline |
| Jacquet Metal Service |
| Summit Hotel Properties |
Jacquet Metal and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Summit Hotel
The main advantage of trading using opposite Jacquet Metal and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal 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.| Jacquet Metal vs. Marie Brizard Wine | Jacquet Metal vs. Treasury Wine Estates | Jacquet Metal vs. GEELY AUTOMOBILE | Jacquet Metal vs. Gol Intelligent Airlines |
| Summit Hotel vs. COPLAND ROAD CAPITAL | Summit Hotel vs. China Resources Beer | Summit Hotel vs. Transport International Holdings | Summit Hotel vs. Texas Roadhouse |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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