Correlation Between Summit Hotel and COPLAND ROAD
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and COPLAND ROAD 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 COPLAND ROAD 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 COPLAND ROAD CAPITAL, you can compare the effects of market volatilities on Summit Hotel and COPLAND ROAD 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 COPLAND ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and COPLAND ROAD.
Diversification Opportunities for Summit Hotel and COPLAND ROAD
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Summit and COPLAND is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and COPLAND ROAD CAPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPLAND ROAD CAPITAL 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 COPLAND ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPLAND ROAD CAPITAL has no effect on the direction of Summit Hotel i.e., Summit Hotel and COPLAND ROAD go up and down completely randomly.
Pair Corralation between Summit Hotel and COPLAND ROAD
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 1.87 times more return on investment than COPLAND ROAD. However, Summit Hotel is 1.87 times more volatile than COPLAND ROAD CAPITAL. It trades about 0.21 of its potential returns per unit of risk. COPLAND ROAD CAPITAL is currently generating about -0.13 per unit of risk. If you would invest 543.00 in Summit Hotel Properties on September 1, 2024 and sell it today you would earn a total of 67.00 from holding Summit Hotel Properties or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Summit Hotel Properties vs. COPLAND ROAD CAPITAL
Performance |
| Timeline |
| Summit Hotel Properties |
| COPLAND ROAD CAPITAL |
Summit Hotel and COPLAND ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and COPLAND ROAD
The main advantage of trading using opposite Summit Hotel and COPLAND ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, COPLAND ROAD 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 COPLAND ROAD will offset losses from the drop in COPLAND ROAD's long position.| Summit Hotel vs. PennantPark Investment | Summit Hotel vs. Strategic Investments AS | Summit Hotel vs. HK Electric Investments | Summit Hotel vs. ELECTRONIC ARTS |
| COPLAND ROAD vs. Superior Plus Corp | COPLAND ROAD vs. NMI Holdings | COPLAND ROAD vs. Origin Agritech | COPLAND ROAD vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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