Correlation Between Lion One and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Sunstone Hotel Investors, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Sunstone Hotel.
Diversification Opportunities for Lion One and Sunstone Hotel
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Sunstone is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Lion One and Sunstone Hotel
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Sunstone Hotel. In addition to that, Lion One is 3.01 times more volatile than Sunstone Hotel Investors. It trades about -0.02 of its total potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.02 per unit of volatility. If you would invest 934.00 in Sunstone Hotel Investors on September 1, 2024 and sell it today you would earn a total of 66.00 from holding Sunstone Hotel Investors or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Lion One Metals |
| Sunstone Hotel Investors |
Lion One and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Sunstone Hotel
The main advantage of trading using opposite Lion One and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. NIPPON STEEL SPADR | Lion One vs. United States Steel | Lion One vs. Nippon Steel | Lion One vs. Singapore Telecommunications Limited |
| Sunstone Hotel vs. Park Hotels Resorts | Sunstone Hotel vs. Pebblebrook Hotel Trust | Sunstone Hotel vs. ASHFORD HOSPITTRUST |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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