Correlation Between Summit Hotel and GURU ORGANIC
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and GURU ORGANIC 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 GURU ORGANIC 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 GURU ORGANIC ENERGY, you can compare the effects of market volatilities on Summit Hotel and GURU ORGANIC 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 GURU ORGANIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and GURU ORGANIC.
Diversification Opportunities for Summit Hotel and GURU ORGANIC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and GURU is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and GURU ORGANIC ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GURU ORGANIC ENERGY 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 GURU ORGANIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GURU ORGANIC ENERGY has no effect on the direction of Summit Hotel i.e., Summit Hotel and GURU ORGANIC go up and down completely randomly.
Pair Corralation between Summit Hotel and GURU ORGANIC
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.47 times more return on investment than GURU ORGANIC. However, Summit Hotel Properties is 2.12 times less risky than GURU ORGANIC. It trades about 0.07 of its potential returns per unit of risk. GURU ORGANIC ENERGY is currently generating about -0.01 per unit of risk. If you would invest 560.00 in Summit Hotel Properties on November 4, 2024 and sell it today you would earn a total of 85.00 from holding Summit Hotel Properties or generate 15.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. GURU ORGANIC ENERGY
Performance |
| Timeline |
| Summit Hotel Properties |
| GURU ORGANIC ENERGY |
Summit Hotel and GURU ORGANIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and GURU ORGANIC
The main advantage of trading using opposite Summit Hotel and GURU ORGANIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, GURU ORGANIC 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 GURU ORGANIC will offset losses from the drop in GURU ORGANIC'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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