Correlation Between Summit Hotel and High Performance
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and High Performance 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 High Performance 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 High Performance Beverages, you can compare the effects of market volatilities on Summit Hotel and High Performance 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 High Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and High Performance.
Diversification Opportunities for Summit Hotel and High Performance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and High is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and High Performance Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Performance Bev 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 High Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Performance Bev has no effect on the direction of Summit Hotel i.e., Summit Hotel and High Performance go up and down completely randomly.
Pair Corralation between Summit Hotel and High Performance
Considering the 90-day investment horizon Summit Hotel is expected to generate 1290.91 times less return on investment than High Performance. But when comparing it to its historical volatility, Summit Hotel Properties is 182.36 times less risky than High Performance. It trades about 0.05 of its potential returns per unit of risk. High Performance Beverages is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 0.01 in High Performance Beverages on September 12, 2024 and sell it today you would lose (0.01) from holding High Performance Beverages or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Summit Hotel Properties vs. High Performance Beverages
Performance |
| Timeline |
| Summit Hotel Properties |
| High Performance Bev |
Summit Hotel and High Performance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and High Performance
The main advantage of trading using opposite Summit Hotel and High Performance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, High Performance 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 High Performance will offset losses from the drop in High Performance'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 |
| High Performance vs. V Group | High Performance vs. Fbec Worldwide | High Performance vs. Hiru Corporation | High Performance vs. Alkame Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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