Correlation Between Summit Hotel and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Franklin Credit 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 Franklin Credit 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 Franklin Credit Management, you can compare the effects of market volatilities on Summit Hotel and Franklin Credit 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 Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Franklin Credit.
Diversification Opportunities for Summit Hotel and Franklin Credit
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Franklin is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana 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 Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Summit Hotel i.e., Summit Hotel and Franklin Credit go up and down completely randomly.
Pair Corralation between Summit Hotel and Franklin Credit
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 0.4 times more return on investment than Franklin Credit. However, Summit Hotel Properties is 2.52 times less risky than Franklin Credit. It trades about 0.19 of its potential returns per unit of risk. Franklin Credit Management is currently generating about -0.11 per unit of risk. If you would invest 604.00 in Summit Hotel Properties on September 1, 2024 and sell it today you would earn a total of 54.00 from holding Summit Hotel Properties or generate 8.94% 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. Franklin Credit Management
Performance |
| Timeline |
| Summit Hotel Properties |
| Franklin Credit Mana |
Summit Hotel and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Franklin Credit
The main advantage of trading using opposite Summit Hotel and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit's long position.| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Service Properties Trust | Summit Hotel vs. RLJ Lodging Trust |
| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |