Correlation Between InterMetro Communications and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both InterMetro Communications 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 InterMetro Communications and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InterMetro Communications and Summit Hotel Properties, you can compare the effects of market volatilities on InterMetro Communications 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 InterMetro Communications with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterMetro Communications and Summit Hotel.
Diversification Opportunities for InterMetro Communications and Summit Hotel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterMetro and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding InterMetro Communications 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 InterMetro Communications 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 InterMetro Communications 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 InterMetro Communications i.e., InterMetro Communications and Summit Hotel go up and down completely randomly.
Pair Corralation between InterMetro Communications and Summit Hotel
If you would invest 0.20 in InterMetro Communications on October 24, 2024 and sell it today you would earn a total of 0.00 from holding InterMetro Communications or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
InterMetro Communications vs. Summit Hotel Properties
Performance |
| Timeline |
| InterMetro Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Summit Hotel Properties |
InterMetro Communications and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterMetro Communications and Summit Hotel
The main advantage of trading using opposite InterMetro Communications and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterMetro Communications 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.The idea behind InterMetro Communications and Summit Hotel Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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