Correlation Between Hemisphere Energy and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy 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 Hemisphere Energy and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy Corp and Summit Hotel Properties, you can compare the effects of market volatilities on Hemisphere Energy 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 Hemisphere Energy with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Summit Hotel.
Diversification Opportunities for Hemisphere Energy and Summit Hotel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hemisphere and Summit is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy Corp 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 Hemisphere Energy 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 Hemisphere Energy Corp 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 Hemisphere Energy i.e., Hemisphere Energy and Summit Hotel go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Summit Hotel
Assuming the 90 days trading horizon Hemisphere Energy Corp is expected to generate 0.99 times more return on investment than Summit Hotel. However, Hemisphere Energy Corp is 1.01 times less risky than Summit Hotel. It trades about 0.08 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.02 per unit of risk. If you would invest 64.00 in Hemisphere Energy Corp on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Hemisphere Energy Corp or generate 93.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemisphere Energy Corp vs. Summit Hotel Properties
Performance |
| Timeline |
| Hemisphere Energy Corp |
| Summit Hotel Properties |
Hemisphere Energy and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Summit Hotel
The main advantage of trading using opposite Hemisphere Energy and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy 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.| Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc |
| Summit Hotel vs. Host Hotels Resorts | Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Xenia Hotels Resorts | Summit 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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