Correlation Between Summit Hotel and EVN AG
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and EVN AG 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 EVN AG 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 EVN AG, you can compare the effects of market volatilities on Summit Hotel and EVN AG 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 EVN AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and EVN AG.
Diversification Opportunities for Summit Hotel and EVN AG
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and EVN is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG 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 EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of Summit Hotel i.e., Summit Hotel and EVN AG go up and down completely randomly.
Pair Corralation between Summit Hotel and EVN AG
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 1.23 times more return on investment than EVN AG. However, Summit Hotel is 1.23 times more volatile than EVN AG. It trades about 0.04 of its potential returns per unit of risk. EVN AG is currently generating about -0.18 per unit of risk. If you would invest 597.00 in Summit Hotel Properties on November 2, 2024 and sell it today you would earn a total of 43.00 from holding Summit Hotel Properties or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Summit Hotel Properties vs. EVN AG
Performance |
| Timeline |
| Summit Hotel Properties |
| EVN AG |
Summit Hotel and EVN AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and EVN AG
The main advantage of trading using opposite Summit Hotel and EVN AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, EVN AG 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 EVN AG will offset losses from the drop in EVN AG's long position.| Summit Hotel vs. National Retail Properties | Summit Hotel vs. 24SEVENOFFICE GROUP AB | Summit Hotel vs. CLEAN ENERGY FUELS | Summit Hotel vs. Caseys General Stores |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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