Correlation Between Summit Hotel and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Dine Brands 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 Dine Brands 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 Dine Brands Global, you can compare the effects of market volatilities on Summit Hotel and Dine Brands 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 Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Dine Brands.
Diversification Opportunities for Summit Hotel and Dine Brands
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and Dine is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Summit Hotel i.e., Summit Hotel and Dine Brands go up and down completely randomly.
Pair Corralation between Summit Hotel and Dine Brands
Considering the 90-day investment horizon Summit Hotel Properties is expected to under-perform the Dine Brands. But the stock apears to be less risky and, when comparing its historical volatility, Summit Hotel Properties is 2.72 times less risky than Dine Brands. The stock trades about -0.04 of its potential returns per unit of risk. The Dine Brands Global is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,034 in Dine Brands Global on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Dine Brands Global or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Dine Brands Global
Performance |
| Timeline |
| Summit Hotel Properties |
| Dine Brands Global |
Summit Hotel and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Dine Brands
The main advantage of trading using opposite Summit Hotel and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' 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 |
| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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