Correlation Between Summit Hotel and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and KLA Tencor 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 KLA Tencor 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 KLA Tencor, you can compare the effects of market volatilities on Summit Hotel and KLA Tencor 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 KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and KLA Tencor.
Diversification Opportunities for Summit Hotel and KLA Tencor
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and KLA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor 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 KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Summit Hotel i.e., Summit Hotel and KLA Tencor go up and down completely randomly.
Pair Corralation between Summit Hotel and KLA Tencor
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 1.24 times more return on investment than KLA Tencor. However, Summit Hotel is 1.24 times more volatile than KLA Tencor. It trades about 0.08 of its potential returns per unit of risk. KLA Tencor is currently generating about -0.2 per unit of risk. If you would invest 629.00 in Summit Hotel Properties on August 31, 2024 and sell it today you would earn a total of 23.00 from holding Summit Hotel Properties or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. KLA Tencor
Performance |
| Timeline |
| Summit Hotel Properties |
| KLA Tencor |
Summit Hotel and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and KLA Tencor
The main advantage of trading using opposite Summit Hotel and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, KLA Tencor 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 KLA Tencor will offset losses from the drop in KLA Tencor's long position.| Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Chatham Lodging Trust |
| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |