Correlation Between Summit Hotel and Black Spade
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Black Spade 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 Black Spade 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 Black Spade Acquisition, you can compare the effects of market volatilities on Summit Hotel and Black Spade 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 Black Spade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Black Spade.
Diversification Opportunities for Summit Hotel and Black Spade
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Black is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Black Spade Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Spade Acquisition 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 Black Spade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Spade Acquisition has no effect on the direction of Summit Hotel i.e., Summit Hotel and Black Spade go up and down completely randomly.
Pair Corralation between Summit Hotel and Black Spade
If you would invest 1,006 in Black Spade Acquisition on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Black Spade Acquisition or generate 0.0% 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. Black Spade Acquisition
Performance |
| Timeline |
| Summit Hotel Properties |
| Black Spade Acquisition |
Summit Hotel and Black Spade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Black Spade
The main advantage of trading using opposite Summit Hotel and Black Spade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Black Spade 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 Black Spade will offset losses from the drop in Black Spade's long position.| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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