Correlation Between Inflection Point and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Inflection Point and Summit Hotel 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 Inflection Point and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and Summit Hotel Properties, you can compare the effects of market volatilities on Inflection Point and Summit Hotel 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 Inflection Point with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Summit Hotel.
Diversification Opportunities for Inflection Point and Summit Hotel
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inflection and Summit is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Inflection Point i.e., Inflection Point and Summit Hotel go up and down completely randomly.
Pair Corralation between Inflection Point and Summit Hotel
Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 0.09 times more return on investment than Summit Hotel. However, Inflection Point Acquisition is 10.92 times less risky than Summit Hotel. It trades about 0.2 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.0 per unit of risk. If you would invest 1,075 in Inflection Point Acquisition on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Inflection Point Acquisition or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. Summit Hotel Properties
Performance |
| Timeline |
| Inflection Point Acq |
| Summit Hotel Properties |
Inflection Point and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and Summit Hotel
The main advantage of trading using opposite Inflection Point and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Inflection Point vs. Arrow Electronics | Inflection Point vs. BioNTech SE | Inflection Point vs. BJs Restaurants | Inflection Point vs. Yum Brands |
| Summit Hotel vs. Sotherly Hotels | Summit Hotel vs. Service Properties Trust | Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Ryman Hospitality Properties |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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