Correlation Between Summit Hotel and CTO Realty
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and CTO Realty 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 CTO Realty 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 CTO Realty Growth, you can compare the effects of market volatilities on Summit Hotel and CTO Realty 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 CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and CTO Realty.
Diversification Opportunities for Summit Hotel and CTO Realty
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Summit and CTO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth 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 CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of Summit Hotel i.e., Summit Hotel and CTO Realty go up and down completely randomly.
Pair Corralation between Summit Hotel and CTO Realty
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 1.35 times more return on investment than CTO Realty. However, Summit Hotel is 1.35 times more volatile than CTO Realty Growth. It trades about 0.09 of its potential returns per unit of risk. CTO Realty Growth is currently generating about 0.1 per unit of risk. If you would invest 602.00 in Summit Hotel Properties on November 18, 2024 and sell it today you would earn a total of 51.00 from holding Summit Hotel Properties or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. CTO Realty Growth
Performance |
| Timeline |
| Summit Hotel Properties |
| CTO Realty Growth |
Summit Hotel and CTO Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and CTO Realty
The main advantage of trading using opposite Summit Hotel and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, CTO Realty 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 CTO Realty will offset losses from the drop in CTO Realty'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 |
| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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