Correlation Between Summit Hotel and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Summit Hotel 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 Summit Hotel and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Hotel Properties and Summit Hotel Properties, you can compare the effects of market volatilities on Summit Hotel 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 Summit Hotel with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Summit Hotel.
Diversification Opportunities for Summit Hotel and Summit Hotel
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Summit and Summit is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties 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 Summit Hotel 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 Summit Hotel Properties 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 Summit Hotel i.e., Summit Hotel and Summit Hotel go up and down completely randomly.
Pair Corralation between Summit Hotel and Summit Hotel
Assuming the 90 days trading horizon Summit Hotel Properties is expected to generate 1.75 times more return on investment than Summit Hotel. However, Summit Hotel is 1.75 times more volatile than Summit Hotel Properties. It trades about 0.09 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.07 per unit of risk. If you would invest 2,037 in Summit Hotel Properties on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Summit Hotel Properties or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Summit Hotel Properties
Performance |
| Timeline |
| Summit Hotel Properties |
| Summit Hotel Properties |
Summit Hotel and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Summit Hotel
The main advantage of trading using opposite Summit Hotel and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel 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.| Summit Hotel vs. Summit Hotel Properties | Summit Hotel vs. Aquagold International | Summit Hotel vs. Morningstar Unconstrained Allocation | Summit Hotel vs. High Yield Municipal Fund |
| Summit Hotel vs. Braemar Hotels Resorts | Summit Hotel vs. Braemar Hotels Resorts | Summit Hotel vs. Aspen Digital | 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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