Correlation Between Summit Hotel and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and GameStop Corp 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 GameStop Corp 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 GameStop Corp, you can compare the effects of market volatilities on Summit Hotel and GameStop Corp 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 GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and GameStop Corp.
Diversification Opportunities for Summit Hotel and GameStop Corp
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Summit and GameStop is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp 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 GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Summit Hotel i.e., Summit Hotel and GameStop Corp go up and down completely randomly.
Pair Corralation between Summit Hotel and GameStop Corp
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 0.42 times more return on investment than GameStop Corp. However, Summit Hotel Properties is 2.4 times less risky than GameStop Corp. It trades about -0.22 of its potential returns per unit of risk. GameStop Corp is currently generating about -0.09 per unit of risk. If you would invest 676.00 in Summit Hotel Properties on November 27, 2024 and sell it today you would lose (42.00) from holding Summit Hotel Properties or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. GameStop Corp
Performance |
| Timeline |
| Summit Hotel Properties |
| GameStop Corp |
Summit Hotel and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and GameStop Corp
The main advantage of trading using opposite Summit Hotel and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp'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 |
| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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