Correlation Between Kinetik Holdings and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings 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 Kinetik Holdings and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and Summit Hotel Properties, you can compare the effects of market volatilities on Kinetik Holdings 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 Kinetik Holdings with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Summit Hotel.
Diversification Opportunities for Kinetik Holdings and Summit Hotel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinetik and Summit is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings 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 Kinetik Holdings 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 Kinetik Holdings 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 Kinetik Holdings i.e., Kinetik Holdings and Summit Hotel go up and down completely randomly.
Pair Corralation between Kinetik Holdings and Summit Hotel
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.9 times more return on investment than Summit Hotel. However, Kinetik Holdings is 1.11 times less risky than Summit Hotel. It trades about 0.1 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 2,696 in Kinetik Holdings on November 26, 2024 and sell it today you would earn a total of 3,118 from holding Kinetik Holdings or generate 115.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kinetik Holdings vs. Summit Hotel Properties
Performance |
Timeline |
Kinetik Holdings |
Summit Hotel Properties |
Kinetik Holdings and Summit Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kinetik Holdings and Summit Hotel
The main advantage of trading using opposite Kinetik Holdings and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings 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.Kinetik Holdings vs. Western Midstream Partners | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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