Correlation Between Summit Hotel and United Breweries
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and United Breweries 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 United Breweries 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 United Breweries Co, you can compare the effects of market volatilities on Summit Hotel and United Breweries 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 United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and United Breweries.
Diversification Opportunities for Summit Hotel and United Breweries
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Summit and United is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries 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 United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of Summit Hotel i.e., Summit Hotel and United Breweries go up and down completely randomly.
Pair Corralation between Summit Hotel and United Breweries
Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the United Breweries. In addition to that, Summit Hotel is 1.06 times more volatile than United Breweries Co. It trades about 0.0 of its total potential returns per unit of risk. United Breweries Co is currently generating about 0.01 per unit of volatility. If you would invest 1,042 in United Breweries Co on September 3, 2024 and sell it today you would earn a total of 18.00 from holding United Breweries Co or generate 1.73% 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. United Breweries Co
Performance |
| Timeline |
| Summit Hotel Properties |
| United Breweries |
Summit Hotel and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and United Breweries
The main advantage of trading using opposite Summit Hotel and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' 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 |
| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |