Correlation Between Summit Hotel and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and DALATA HOTEL 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 DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on Summit Hotel and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and DALATA HOTEL.
Diversification Opportunities for Summit Hotel and DALATA HOTEL
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and DALATA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of Summit Hotel i.e., Summit Hotel and DALATA HOTEL go up and down completely randomly.
Pair Corralation between Summit Hotel and DALATA HOTEL
Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the DALATA HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, Summit Hotel Properties is 1.26 times less risky than DALATA HOTEL. The stock trades about -0.08 of its potential returns per unit of risk. The DALATA HOTEL is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 421.00 in DALATA HOTEL on October 12, 2024 and sell it today you would earn a total of 1.00 from holding DALATA HOTEL or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Summit Hotel Properties vs. DALATA HOTEL
Performance |
| Timeline |
| Summit Hotel Properties |
| DALATA HOTEL |
Summit Hotel and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and DALATA HOTEL
The main advantage of trading using opposite Summit Hotel and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL'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 |
| DALATA HOTEL vs. SIERRA METALS | DALATA HOTEL vs. Forsys Metals Corp | DALATA HOTEL vs. Summit Hotel Properties | DALATA HOTEL vs. Hyatt Hotels |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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