Correlation Between Summit Hotel and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Citic Telecom 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 Citic Telecom 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 Citic Telecom International, you can compare the effects of market volatilities on Summit Hotel and Citic Telecom 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 Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Citic Telecom.
Diversification Opportunities for Summit Hotel and Citic Telecom
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Citic is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern 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 Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of Summit Hotel i.e., Summit Hotel and Citic Telecom go up and down completely randomly.
Pair Corralation between Summit Hotel and Citic Telecom
Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the Citic Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Summit Hotel Properties is 1.26 times less risky than Citic Telecom. The stock trades about -0.08 of its potential returns per unit of risk. The Citic Telecom International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Citic Telecom International on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Citic Telecom International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Citic Telecom International
Performance |
| Timeline |
| Summit Hotel Properties |
| Citic Telecom Intern |
Summit Hotel and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Citic Telecom
The main advantage of trading using opposite Summit Hotel and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Citic Telecom 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 Citic Telecom will offset losses from the drop in Citic Telecom's long position.| Summit Hotel vs. FIRST SAVINGS FINL | Summit Hotel vs. Darden Restaurants | Summit Hotel vs. INTERSHOP Communications Aktiengesellschaft | Summit Hotel vs. Spirent Communications plc |
| Citic Telecom vs. MCEWEN MINING INC | Citic Telecom vs. ARDAGH METAL PACDL 0001 | Citic Telecom vs. MAGNUM MINING EXP | Citic Telecom vs. Western Copper and |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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