Correlation Between Summit Hotel and SOEDER SPORTFISKE
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and SOEDER SPORTFISKE 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 SOEDER SPORTFISKE 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 SOEDER SPORTFISKE AB, you can compare the effects of market volatilities on Summit Hotel and SOEDER SPORTFISKE 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 SOEDER SPORTFISKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and SOEDER SPORTFISKE.
Diversification Opportunities for Summit Hotel and SOEDER SPORTFISKE
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and SOEDER is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and SOEDER SPORTFISKE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOEDER SPORTFISKE 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 SOEDER SPORTFISKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOEDER SPORTFISKE has no effect on the direction of Summit Hotel i.e., Summit Hotel and SOEDER SPORTFISKE go up and down completely randomly.
Pair Corralation between Summit Hotel and SOEDER SPORTFISKE
Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the SOEDER SPORTFISKE. But the stock apears to be less risky and, when comparing its historical volatility, Summit Hotel Properties is 2.4 times less risky than SOEDER SPORTFISKE. The stock trades about -0.09 of its potential returns per unit of risk. The SOEDER SPORTFISKE AB is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 208.00 in SOEDER SPORTFISKE AB on October 28, 2024 and sell it today you would earn a total of 41.00 from holding SOEDER SPORTFISKE AB or generate 19.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. SOEDER SPORTFISKE AB
Performance |
| Timeline |
| Summit Hotel Properties |
| SOEDER SPORTFISKE |
Summit Hotel and SOEDER SPORTFISKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and SOEDER SPORTFISKE
The main advantage of trading using opposite Summit Hotel and SOEDER SPORTFISKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, SOEDER SPORTFISKE 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 SOEDER SPORTFISKE will offset losses from the drop in SOEDER SPORTFISKE's long position.| Summit Hotel vs. Xiwang Special Steel | Summit Hotel vs. MAANSHAN IRON H | Summit Hotel vs. United States Steel | Summit Hotel vs. CALTAGIRONE EDITORE |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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