Correlation Between USU Software and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both USU Software 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 USU Software and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USU Software AG and Summit Hotel Properties, you can compare the effects of market volatilities on USU Software 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 USU Software with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of USU Software and Summit Hotel.
Diversification Opportunities for USU Software and Summit Hotel
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between USU and Summit is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding USU Software AG 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 USU Software 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 USU Software AG 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 USU Software i.e., USU Software and Summit Hotel go up and down completely randomly.
Pair Corralation between USU Software and Summit Hotel
Assuming the 90 days trading horizon USU Software AG is expected to generate 1.03 times more return on investment than Summit Hotel. However, USU Software is 1.03 times more volatile than Summit Hotel Properties. It trades about 0.02 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 1,935 in USU Software AG on September 12, 2024 and sell it today you would earn a total of 295.00 from holding USU Software AG or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USU Software AG vs. Summit Hotel Properties
Performance |
| Timeline |
| USU Software AG |
| Summit Hotel Properties |
USU Software and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USU Software and Summit Hotel
The main advantage of trading using opposite USU Software and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USU Software 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.| USU Software vs. SENECA FOODS A | USU Software vs. Lifeway Foods | USU Software vs. PT Indofood Sukses | USU Software vs. Verizon Communications |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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