Correlation Between Summit Hotel and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Barings BDC 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 Barings BDC 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 Barings BDC, you can compare the effects of market volatilities on Summit Hotel and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Barings BDC.
Diversification Opportunities for Summit Hotel and Barings BDC
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Summit and Barings is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Summit Hotel i.e., Summit Hotel and Barings BDC go up and down completely randomly.
Pair Corralation between Summit Hotel and Barings BDC
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 1.75 times more return on investment than Barings BDC. However, Summit Hotel is 1.75 times more volatile than Barings BDC. It trades about 0.06 of its potential returns per unit of risk. Barings BDC is currently generating about 0.06 per unit of risk. If you would invest 586.00 in Summit Hotel Properties on September 3, 2024 and sell it today you would earn a total of 71.00 from holding Summit Hotel Properties or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Barings BDC
Performance |
| Timeline |
| Summit Hotel Properties |
| Barings BDC |
Summit Hotel and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Barings BDC
The main advantage of trading using opposite Summit Hotel and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.| Summit Hotel vs. Sotherly Hotels | Summit Hotel vs. Service Properties Trust | Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Ryman Hospitality Properties |
| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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