Correlation Between Summit Hotel and Media
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on Summit Hotel and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Media.
Diversification Opportunities for Summit Hotel and Media
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Media is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Summit Hotel i.e., Summit Hotel and Media go up and down completely randomly.
Pair Corralation between Summit Hotel and Media
Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the Media. But the stock apears to be less risky and, when comparing its historical volatility, Summit Hotel Properties is 2.8 times less risky than Media. The stock trades about -0.08 of its potential returns per unit of risk. The Media and Games is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 318.00 in Media and Games on October 25, 2024 and sell it today you would lose (10.00) from holding Media and Games or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Media and Games
Performance |
| Timeline |
| Summit Hotel Properties |
| Media and Games |
Summit Hotel and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Media
The main advantage of trading using opposite Summit Hotel and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| Summit Hotel vs. Tyson Foods | Summit Hotel vs. FARM 51 GROUP | Summit Hotel vs. CN MODERN DAIRY | Summit Hotel vs. PATTIES FOODS |
| Media vs. China Resources Beer | Media vs. Playa Hotels Resorts | Media vs. Summit Hotel Properties | Media vs. DALATA HOTEL |
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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