Correlation Between Summit Hotel and BioNTech
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and BioNTech 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 BioNTech 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 BioNTech SE, you can compare the effects of market volatilities on Summit Hotel and BioNTech 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 BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and BioNTech.
Diversification Opportunities for Summit Hotel and BioNTech
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and BioNTech is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE 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 BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Summit Hotel i.e., Summit Hotel and BioNTech go up and down completely randomly.
Pair Corralation between Summit Hotel and BioNTech
Considering the 90-day investment horizon Summit Hotel is expected to generate 1.76 times less return on investment than BioNTech. But when comparing it to its historical volatility, Summit Hotel Properties is 1.78 times less risky than BioNTech. It trades about 0.17 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 10,632 in BioNTech SE on September 13, 2024 and sell it today you would earn a total of 1,302 from holding BioNTech SE or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. BioNTech SE
Performance |
| Timeline |
| Summit Hotel Properties |
| BioNTech SE |
Summit Hotel and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and BioNTech
The main advantage of trading using opposite Summit Hotel and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, BioNTech 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 BioNTech will offset losses from the drop in BioNTech's long position.| Summit Hotel vs. Park Hotels Resorts | Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Pebblebrook Hotel Trust |
| BioNTech vs. Puma Biotechnology | BioNTech vs. Iovance Biotherapeutics | BioNTech vs. Sarepta Therapeutics | BioNTech vs. Day One Biopharmaceuticals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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