Correlation Between Summit Hotel and Adtalem Global
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Adtalem Global 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 Adtalem Global 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 Adtalem Global Education, you can compare the effects of market volatilities on Summit Hotel and Adtalem Global 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 Adtalem Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Adtalem Global.
Diversification Opportunities for Summit Hotel and Adtalem Global
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Adtalem is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education 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 Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of Summit Hotel i.e., Summit Hotel and Adtalem Global go up and down completely randomly.
Pair Corralation between Summit Hotel and Adtalem Global
Assuming the 90 days horizon Summit Hotel is expected to generate 2.11 times less return on investment than Adtalem Global. But when comparing it to its historical volatility, Summit Hotel Properties is 1.1 times less risky than Adtalem Global. It trades about 0.08 of its potential returns per unit of risk. Adtalem Global Education is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 6,700 in Adtalem Global Education on November 3, 2024 and sell it today you would earn a total of 3,500 from holding Adtalem Global Education or generate 52.24% 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. Adtalem Global Education
Performance |
| Timeline |
| Summit Hotel Properties |
| Adtalem Global Education |
Summit Hotel and Adtalem Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Adtalem Global
The main advantage of trading using opposite Summit Hotel and Adtalem Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Adtalem Global 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 Adtalem Global will offset losses from the drop in Adtalem Global'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 |
| Adtalem Global vs. SAN MIGUEL BREWERY | Adtalem Global vs. Canadian Utilities Limited | Adtalem Global vs. Algonquin Power Utilities | Adtalem Global vs. Monster Beverage Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |