Correlation Between Summit Hotel and Broadridge Financial
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Broadridge Financial 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 Broadridge Financial 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 Broadridge Financial Solutions, you can compare the effects of market volatilities on Summit Hotel and Broadridge Financial 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 Broadridge Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Broadridge Financial.
Diversification Opportunities for Summit Hotel and Broadridge Financial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Summit and Broadridge is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Broadridge Financial Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadridge Financial 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 Broadridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadridge Financial has no effect on the direction of Summit Hotel i.e., Summit Hotel and Broadridge Financial go up and down completely randomly.
Pair Corralation between Summit Hotel and Broadridge Financial
Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the Broadridge Financial. In addition to that, Summit Hotel is 1.23 times more volatile than Broadridge Financial Solutions. It trades about -0.05 of its total potential returns per unit of risk. Broadridge Financial Solutions is currently generating about 0.12 per unit of volatility. If you would invest 21,800 in Broadridge Financial Solutions on October 26, 2024 and sell it today you would earn a total of 600.00 from holding Broadridge Financial Solutions or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Broadridge Financial Solutions
Performance |
| Timeline |
| Summit Hotel Properties |
| Broadridge Financial |
Summit Hotel and Broadridge Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Broadridge Financial
The main advantage of trading using opposite Summit Hotel and Broadridge Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Broadridge Financial 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 Broadridge Financial will offset losses from the drop in Broadridge Financial's long position.| Summit Hotel vs. Micron Technology | Summit Hotel vs. AECOM TECHNOLOGY | Summit Hotel vs. GEAR4MUSIC LS 10 | Summit Hotel vs. Western Copper and |
| Broadridge Financial vs. SUN LIFE FINANCIAL | Broadridge Financial vs. ARDAGH METAL PACDL 0001 | Broadridge Financial vs. Harmony Gold Mining | Broadridge Financial vs. Perseus Mining Limited |
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 CEOs Directory module to screen CEOs from public companies around the world.
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