Correlation Between Pinstripes Holdings and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Pinstripes 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 Pinstripes 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 Pinstripes Holdings and Summit Hotel Properties, you can compare the effects of market volatilities on Pinstripes 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 Pinstripes Holdings with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinstripes Holdings and Summit Hotel.
Diversification Opportunities for Pinstripes Holdings and Summit Hotel
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pinstripes and Summit is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pinstripes 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 Pinstripes 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 Pinstripes 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 Pinstripes Holdings i.e., Pinstripes Holdings and Summit Hotel go up and down completely randomly.
Pair Corralation between Pinstripes Holdings and Summit Hotel
Given the investment horizon of 90 days Pinstripes Holdings is expected to generate 7.28 times more return on investment than Summit Hotel. However, Pinstripes Holdings is 7.28 times more volatile than Summit Hotel Properties. It trades about 0.11 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.01 per unit of risk. If you would invest 42.00 in Pinstripes Holdings on November 5, 2024 and sell it today you would earn a total of 5.00 from holding Pinstripes Holdings or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Pinstripes Holdings vs. Summit Hotel Properties
Performance |
| Timeline |
| Pinstripes Holdings |
| Summit Hotel Properties |
Pinstripes Holdings and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinstripes Holdings and Summit Hotel
The main advantage of trading using opposite Pinstripes Holdings and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinstripes 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.| Pinstripes Holdings vs. Pinterest | Pinstripes Holdings vs. NorthWestern | Pinstripes Holdings vs. PPL Corporation | Pinstripes Holdings vs. Cheche Group Class |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. RLJ Lodging Trust | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Sunstone Hotel Investors |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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