Correlation Between VIVA WINE and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both VIVA WINE and Sunstone 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 VIVA WINE and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and Sunstone Hotel Investors, you can compare the effects of market volatilities on VIVA WINE and Sunstone 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 VIVA WINE with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Sunstone Hotel.
Diversification Opportunities for VIVA WINE and Sunstone Hotel
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VIVA and Sunstone is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Sunstone Hotel Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunstone Hotel Investors and VIVA WINE 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 VIVA WINE GROUP are associated (or correlated) with Sunstone Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunstone Hotel Investors has no effect on the direction of VIVA WINE i.e., VIVA WINE and Sunstone Hotel go up and down completely randomly.
Pair Corralation between VIVA WINE and Sunstone Hotel
Assuming the 90 days horizon VIVA WINE GROUP is expected to under-perform the Sunstone Hotel. But the stock apears to be less risky and, when comparing its historical volatility, VIVA WINE GROUP is 1.56 times less risky than Sunstone Hotel. The stock trades about -0.01 of its potential returns per unit of risk. The Sunstone Hotel Investors is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 950.00 in Sunstone Hotel Investors on August 30, 2024 and sell it today you would earn a total of 70.00 from holding Sunstone Hotel Investors or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Sunstone Hotel Investors
Performance |
| Timeline |
| VIVA WINE GROUP |
| Sunstone Hotel Investors |
VIVA WINE and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Sunstone Hotel
The main advantage of trading using opposite VIVA WINE and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE position performs unexpectedly, Sunstone 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 Sunstone Hotel will offset losses from the drop in Sunstone Hotel's long position.| VIVA WINE vs. Corporate Office Properties | VIVA WINE vs. KB HOME | VIVA WINE vs. Tri Pointe Homes | VIVA WINE vs. AUSTEVOLL SEAFOOD |
| Sunstone Hotel vs. MACOM Technology Solutions | Sunstone Hotel vs. COMBA TELECOM SYST | Sunstone Hotel vs. Shenandoah Telecommunications | Sunstone Hotel vs. Wayside Technology Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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