Correlation Between InnSuites Hospitality and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both InnSuites Hospitality 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 InnSuites Hospitality and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnSuites Hospitality Trust and Summit Hotel Properties, you can compare the effects of market volatilities on InnSuites Hospitality 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 InnSuites Hospitality with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnSuites Hospitality and Summit Hotel.
Diversification Opportunities for InnSuites Hospitality and Summit Hotel
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InnSuites and Summit is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding InnSuites Hospitality Trust 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 InnSuites Hospitality 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 InnSuites Hospitality Trust 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 InnSuites Hospitality i.e., InnSuites Hospitality and Summit Hotel go up and down completely randomly.
Pair Corralation between InnSuites Hospitality and Summit Hotel
Considering the 90-day investment horizon InnSuites Hospitality Trust is expected to generate 1.08 times more return on investment than Summit Hotel. However, InnSuites Hospitality is 1.08 times more volatile than Summit Hotel Properties. It trades about 0.26 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.11 per unit of risk. If you would invest 189.00 in InnSuites Hospitality Trust on August 29, 2024 and sell it today you would earn a total of 28.00 from holding InnSuites Hospitality Trust or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnSuites Hospitality Trust vs. Summit Hotel Properties
Performance |
| Timeline |
| InnSuites Hospitality |
| Summit Hotel Properties |
InnSuites Hospitality and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnSuites Hospitality and Summit Hotel
The main advantage of trading using opposite InnSuites Hospitality and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnSuites Hospitality 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.| InnSuites Hospitality vs. Regional Health Properties | InnSuites Hospitality vs. SemiLEDS | InnSuites Hospitality vs. SunLink Health Systems | InnSuites Hospitality vs. Avalon Holdings |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. RLJ Lodging Trust | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Sunstone Hotel Investors |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance |