Correlation Between Summit Hotel and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and RETAIL FOOD 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 RETAIL FOOD 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 RETAIL FOOD GROUP, you can compare the effects of market volatilities on Summit Hotel and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and RETAIL FOOD.
Diversification Opportunities for Summit Hotel and RETAIL FOOD
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Summit and RETAIL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Summit Hotel i.e., Summit Hotel and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Summit Hotel and RETAIL FOOD
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.65 times more return on investment than RETAIL FOOD. However, Summit Hotel Properties is 1.53 times less risky than RETAIL FOOD. It trades about 0.02 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about 0.0 per unit of risk. If you would invest 613.00 in Summit Hotel Properties on September 14, 2024 and sell it today you would earn a total of 32.00 from holding Summit Hotel Properties or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Summit Hotel Properties |
| RETAIL FOOD GROUP |
Summit Hotel and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and RETAIL FOOD
The main advantage of trading using opposite Summit Hotel and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Summit Hotel vs. NORWEGIAN AIR SHUT | Summit Hotel vs. TOREX SEMICONDUCTOR LTD | Summit Hotel vs. Ryanair Holdings plc | Summit Hotel vs. Magnachip Semiconductor |
| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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