Correlation Between Summit Hotel and Getty Realty
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Getty 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 Getty 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 Getty Realty, you can compare the effects of market volatilities on Summit Hotel and Getty 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 Getty Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Getty Realty.
Diversification Opportunities for Summit Hotel and Getty Realty
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Summit and Getty is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Summit Hotel i.e., Summit Hotel and Getty Realty go up and down completely randomly.
Pair Corralation between Summit Hotel and Getty Realty
Considering the 90-day investment horizon Summit Hotel Properties is expected to under-perform the Getty Realty. In addition to that, Summit Hotel is 3.09 times more volatile than Getty Realty. It trades about -0.51 of its total potential returns per unit of risk. Getty Realty is currently generating about -0.35 per unit of volatility. If you would invest 3,082 in Getty Realty on January 9, 2025 and sell it today you would lose (329.00) from holding Getty Realty or give up 10.67% 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. Getty Realty
Performance |
| Timeline |
| Summit Hotel Properties |
| Getty Realty |
Summit Hotel and Getty Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Getty Realty
The main advantage of trading using opposite Summit Hotel and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Getty 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 Getty Realty will offset losses from the drop in Getty 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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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