Correlation Between Summit Hotel and Hafnia
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Hafnia 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 Hafnia 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 Hafnia Limited, you can compare the effects of market volatilities on Summit Hotel and Hafnia 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 Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Hafnia.
Diversification Opportunities for Summit Hotel and Hafnia
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and Hafnia is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Summit Hotel i.e., Summit Hotel and Hafnia go up and down completely randomly.
Pair Corralation between Summit Hotel and Hafnia
Assuming the 90 days horizon Summit Hotel is expected to generate 12.2 times less return on investment than Hafnia. But when comparing it to its historical volatility, Summit Hotel Properties is 1.33 times less risky than Hafnia. It trades about 0.01 of its potential returns per unit of risk. Hafnia Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 309.00 in Hafnia Limited on October 20, 2024 and sell it today you would earn a total of 189.00 from holding Hafnia Limited or generate 61.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.21% |
| Values | Daily Returns |
Summit Hotel Properties vs. Hafnia Limited
Performance |
| Timeline |
| Summit Hotel Properties |
| Hafnia Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Summit Hotel and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Hafnia
The main advantage of trading using opposite Summit Hotel and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's long position.| Summit Hotel vs. Treasury Wine Estates | Summit Hotel vs. VIRGIN WINES UK | Summit Hotel vs. American Public Education | Summit Hotel vs. TAL Education Group |
| Hafnia vs. Osisko Metals | Hafnia vs. GREENX METALS LTD | Hafnia vs. ADRIATIC METALS LS 013355 | Hafnia vs. Fair Isaac Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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