Correlation Between Summit Hotel and Cencora
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Cencora 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 Cencora 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 Cencora, you can compare the effects of market volatilities on Summit Hotel and Cencora 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 Cencora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Cencora.
Diversification Opportunities for Summit Hotel and Cencora
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and Cencora is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora 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 Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Summit Hotel i.e., Summit Hotel and Cencora go up and down completely randomly.
Pair Corralation between Summit Hotel and Cencora
Considering the 90-day investment horizon Summit Hotel is expected to generate 1.65 times less return on investment than Cencora. In addition to that, Summit Hotel is 1.82 times more volatile than Cencora. It trades about 0.04 of its total potential returns per unit of risk. Cencora is currently generating about 0.11 per unit of volatility. If you would invest 17,571 in Cencora on September 3, 2024 and sell it today you would earn a total of 7,416 from holding Cencora or generate 42.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Cencora
Performance |
| Timeline |
| Summit Hotel Properties |
| Cencora |
Summit Hotel and Cencora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Cencora
The main advantage of trading using opposite Summit Hotel and Cencora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Cencora 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 Cencora will offset losses from the drop in Cencora'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 |
| Cencora vs. Viemed Healthcare | Cencora vs. SNDL Inc | Cencora vs. The Coca Cola | Cencora vs. High Performance Beverages |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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