Correlation Between Summit Hotel and SL Green
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and SL Green 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 SL Green 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 SL Green Realty, you can compare the effects of market volatilities on Summit Hotel and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and SL Green.
Diversification Opportunities for Summit Hotel and SL Green
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and SLG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Summit Hotel i.e., Summit Hotel and SL Green go up and down completely randomly.
Pair Corralation between Summit Hotel and SL Green
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 1.2 times more return on investment than SL Green. However, Summit Hotel is 1.2 times more volatile than SL Green Realty. It trades about 0.32 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.07 per unit of risk. If you would invest 609.00 in Summit Hotel Properties on September 18, 2024 and sell it today you would earn a total of 81.00 from holding Summit Hotel Properties or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. SL Green Realty
Performance |
| Timeline |
| Summit Hotel Properties |
| SL Green Realty |
Summit Hotel and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and SL Green
The main advantage of trading using opposite Summit Hotel and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.| Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Service Properties Trust | Summit Hotel vs. RLJ Lodging Trust |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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