Correlation Between Summit Hotel and ODYSSEY GOLD
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and ODYSSEY GOLD 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 ODYSSEY GOLD 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 ODYSSEY GOLD LTD, you can compare the effects of market volatilities on Summit Hotel and ODYSSEY GOLD 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 ODYSSEY GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and ODYSSEY GOLD.
Diversification Opportunities for Summit Hotel and ODYSSEY GOLD
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and ODYSSEY is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and ODYSSEY GOLD LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODYSSEY GOLD LTD 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 ODYSSEY GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODYSSEY GOLD LTD has no effect on the direction of Summit Hotel i.e., Summit Hotel and ODYSSEY GOLD go up and down completely randomly.
Pair Corralation between Summit Hotel and ODYSSEY GOLD
Assuming the 90 days horizon Summit Hotel is expected to generate 52.19 times less return on investment than ODYSSEY GOLD. But when comparing it to its historical volatility, Summit Hotel Properties is 6.58 times less risky than ODYSSEY GOLD. It trades about 0.01 of its potential returns per unit of risk. ODYSSEY GOLD LTD is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.20 in ODYSSEY GOLD LTD on October 13, 2024 and sell it today you would lose (1.35) from holding ODYSSEY GOLD LTD or give up 61.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. ODYSSEY GOLD LTD
Performance |
| Timeline |
| Summit Hotel Properties |
| ODYSSEY GOLD LTD |
Summit Hotel and ODYSSEY GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and ODYSSEY GOLD
The main advantage of trading using opposite Summit Hotel and ODYSSEY GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, ODYSSEY GOLD 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 ODYSSEY GOLD will offset losses from the drop in ODYSSEY GOLD's long position.| Summit Hotel vs. AOYAMA TRADING | Summit Hotel vs. X FAB Silicon Foundries | Summit Hotel vs. Alfa Financial Software | Summit Hotel vs. MEDCAW INVESTMENTS LS 01 |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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