Correlation Between Summit Hotel and Materialise
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Materialise 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 Summit Hotel and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Hotel Properties and Materialise NV, you can compare the effects of market volatilities on Summit Hotel and Materialise 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 Summit Hotel with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Materialise.
Diversification Opportunities for Summit Hotel and Materialise
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Materialise is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Summit Hotel 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 Summit Hotel Properties are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Summit Hotel i.e., Summit Hotel and Materialise go up and down completely randomly.
Pair Corralation between Summit Hotel and Materialise
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.41 times more return on investment than Materialise. However, Summit Hotel Properties is 2.47 times less risky than Materialise. It trades about 0.04 of its potential returns per unit of risk. Materialise NV is currently generating about -0.04 per unit of risk. If you would invest 645.00 in Summit Hotel Properties on October 17, 2024 and sell it today you would earn a total of 5.00 from holding Summit Hotel Properties or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Materialise NV
Performance |
| Timeline |
| Summit Hotel Properties |
| Materialise NV |
Summit Hotel and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Materialise
The main advantage of trading using opposite Summit Hotel and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| Summit Hotel vs. MidCap Financial Investment | Summit Hotel vs. FUYO GENERAL LEASE | Summit Hotel vs. FIRST SHIP LEASE | Summit Hotel vs. United Rentals |
| Materialise vs. Summit Hotel Properties | Materialise vs. Teradata Corp | Materialise vs. MICRONIC MYDATA | Materialise vs. DALATA HOTEL |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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