Correlation Between Summit Hotel and Coursera
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Coursera 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 Coursera 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 Coursera, you can compare the effects of market volatilities on Summit Hotel and Coursera 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 Coursera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Coursera.
Diversification Opportunities for Summit Hotel and Coursera
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Coursera is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera 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 Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of Summit Hotel i.e., Summit Hotel and Coursera go up and down completely randomly.
Pair Corralation between Summit Hotel and Coursera
Considering the 90-day investment horizon Summit Hotel is expected to generate 3.69 times less return on investment than Coursera. But when comparing it to its historical volatility, Summit Hotel Properties is 1.24 times less risky than Coursera. It trades about 0.08 of its potential returns per unit of risk. Coursera is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 705.00 in Coursera on August 31, 2024 and sell it today you would earn a total of 115.00 from holding Coursera or generate 16.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Summit Hotel Properties vs. Coursera
Performance |
| Timeline |
| Summit Hotel Properties |
| Coursera |
Summit Hotel and Coursera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Coursera
The main advantage of trading using opposite Summit Hotel and Coursera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Coursera 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 Coursera will offset losses from the drop in Coursera's long position.| Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Xenia Hotels Resorts |
| Coursera vs. Chegg Inc | Coursera vs. Skillsoft Corp | Coursera vs. Laureate Education | Coursera vs. Udemy Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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