Correlation Between Summit Hotel and Blackstone
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Blackstone 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 Blackstone 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 Blackstone Group, you can compare the effects of market volatilities on Summit Hotel and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Blackstone.
Diversification Opportunities for Summit Hotel and Blackstone
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Summit and Blackstone is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Summit Hotel i.e., Summit Hotel and Blackstone go up and down completely randomly.
Pair Corralation between Summit Hotel and Blackstone
Assuming the 90 days horizon Summit Hotel is expected to generate 1.46 times less return on investment than Blackstone. In addition to that, Summit Hotel is 1.17 times more volatile than Blackstone Group. It trades about 0.18 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.31 per unit of volatility. If you would invest 15,580 in Blackstone Group on September 4, 2024 and sell it today you would earn a total of 2,540 from holding Blackstone Group or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Blackstone Group
Performance |
| Timeline |
| Summit Hotel Properties |
| Blackstone Group |
Summit Hotel and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Blackstone
The main advantage of trading using opposite Summit Hotel and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| Summit Hotel vs. Host Hotels Resorts | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Park Hotels Resorts | Summit Hotel vs. Pebblebrook Hotel Trust |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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