Correlation Between Summit Hotel and Enwell Energy
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Enwell Energy 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 Enwell Energy 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 Enwell Energy plc, you can compare the effects of market volatilities on Summit Hotel and Enwell Energy 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 Enwell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Enwell Energy.
Diversification Opportunities for Summit Hotel and Enwell Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and Enwell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Enwell Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enwell Energy plc 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 Enwell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enwell Energy plc has no effect on the direction of Summit Hotel i.e., Summit Hotel and Enwell Energy go up and down completely randomly.
Pair Corralation between Summit Hotel and Enwell Energy
Considering the 90-day investment horizon Summit Hotel is expected to generate 22.07 times less return on investment than Enwell Energy. But when comparing it to its historical volatility, Summit Hotel Properties is 5.89 times less risky than Enwell Energy. It trades about 0.01 of its potential returns per unit of risk. Enwell Energy plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Enwell Energy plc on August 31, 2024 and sell it today you would lose (12.00) from holding Enwell Energy plc or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Summit Hotel Properties vs. Enwell Energy plc
Performance |
| Timeline |
| Summit Hotel Properties |
| Enwell Energy plc |
Summit Hotel and Enwell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Enwell Energy
The main advantage of trading using opposite Summit Hotel and Enwell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Enwell Energy 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 Enwell Energy will offset losses from the drop in Enwell Energy's long position.| Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Xenia Hotels Resorts |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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