Correlation Between Summit Hotel and Willscot Mobile
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Willscot Mobile 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 Willscot Mobile 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 Willscot Mobile Mini, you can compare the effects of market volatilities on Summit Hotel and Willscot Mobile 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 Willscot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Willscot Mobile.
Diversification Opportunities for Summit Hotel and Willscot Mobile
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Summit and Willscot is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Willscot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willscot Mobile Mini 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 Willscot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willscot Mobile Mini has no effect on the direction of Summit Hotel i.e., Summit Hotel and Willscot Mobile go up and down completely randomly.
Pair Corralation between Summit Hotel and Willscot Mobile
Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 0.94 times more return on investment than Willscot Mobile. However, Summit Hotel Properties is 1.07 times less risky than Willscot Mobile. It trades about 0.0 of its potential returns per unit of risk. Willscot Mobile Mini is currently generating about -0.01 per unit of risk. If you would invest 743.00 in Summit Hotel Properties on September 2, 2024 and sell it today you would lose (85.00) from holding Summit Hotel Properties or give up 11.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Willscot Mobile Mini
Performance |
| Timeline |
| Summit Hotel Properties |
| Willscot Mobile Mini |
Summit Hotel and Willscot Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Willscot Mobile
The main advantage of trading using opposite Summit Hotel and Willscot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Willscot Mobile 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 Willscot Mobile will offset losses from the drop in Willscot Mobile's long position.| Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Service Properties Trust | Summit Hotel vs. RLJ Lodging Trust |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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