Correlation Between Summit Hotel and RMG Acquisition
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and RMG Acquisition 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 RMG Acquisition 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 RMG Acquisition Corp, you can compare the effects of market volatilities on Summit Hotel and RMG Acquisition 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 RMG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and RMG Acquisition.
Diversification Opportunities for Summit Hotel and RMG Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and RMG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and RMG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMG Acquisition 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 RMG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMG Acquisition Corp has no effect on the direction of Summit Hotel i.e., Summit Hotel and RMG Acquisition go up and down completely randomly.
Pair Corralation between Summit Hotel and RMG Acquisition
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 1.63 times more return on investment than RMG Acquisition. However, Summit Hotel is 1.63 times more volatile than RMG Acquisition Corp. It trades about 0.0 of its potential returns per unit of risk. RMG Acquisition Corp is currently generating about -0.01 per unit of risk. If you would invest 763.00 in Summit Hotel Properties on November 2, 2024 and sell it today you would lose (82.50) from holding Summit Hotel Properties or give up 10.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 69.37% |
| Values | Daily Returns |
Summit Hotel Properties vs. RMG Acquisition Corp
Performance |
| Timeline |
| Summit Hotel Properties |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Summit Hotel and RMG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and RMG Acquisition
The main advantage of trading using opposite Summit Hotel and RMG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, RMG Acquisition 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 RMG Acquisition will offset losses from the drop in RMG Acquisition'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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