Correlation Between Summit Hotel and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Summit Hotel and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and SWISS WATER.
Diversification Opportunities for Summit Hotel and SWISS WATER
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and SWISS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Summit Hotel i.e., Summit Hotel and SWISS WATER go up and down completely randomly.
Pair Corralation between Summit Hotel and SWISS WATER
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.77 times more return on investment than SWISS WATER. However, Summit Hotel Properties is 1.31 times less risky than SWISS WATER. It trades about 0.06 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.04 per unit of risk. If you would invest 535.00 in Summit Hotel Properties on September 3, 2024 and sell it today you would earn a total of 75.00 from holding Summit Hotel Properties or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Summit Hotel Properties |
| SWISS WATER DECAFFCOFFEE |
Summit Hotel and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and SWISS WATER
The main advantage of trading using opposite Summit Hotel and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Summit Hotel vs. PSI Software AG | Summit Hotel vs. Cogent Communications Holdings | Summit Hotel vs. CyberArk Software | Summit Hotel vs. INTERSHOP Communications Aktiengesellschaft |
| SWISS WATER vs. Nestl SA | SWISS WATER vs. Kraft Heinz Co | SWISS WATER vs. General Mills | SWISS WATER vs. Kellogg Company |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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