Correlation Between Summit Hotel and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and CapitaLand Investment 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 CapitaLand Investment 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 CapitaLand Investment Limited, you can compare the effects of market volatilities on Summit Hotel and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and CapitaLand Investment.
Diversification Opportunities for Summit Hotel and CapitaLand Investment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and CapitaLand is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Summit Hotel i.e., Summit Hotel and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Summit Hotel and CapitaLand Investment
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 0.43 times more return on investment than CapitaLand Investment. However, Summit Hotel Properties is 2.34 times less risky than CapitaLand Investment. It trades about 0.02 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.01 per unit of risk. If you would invest 587.00 in Summit Hotel Properties on December 6, 2024 and sell it today you would earn a total of 58.00 from holding Summit Hotel Properties or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Summit Hotel Properties vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Summit Hotel Properties |
| CapitaLand Investment |
Summit Hotel and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and CapitaLand Investment
The main advantage of trading using opposite Summit Hotel and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment'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 |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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