Correlation Between Summit Hotel and Piper Sandler
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Piper Sandler 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 Piper Sandler 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 Piper Sandler Companies, you can compare the effects of market volatilities on Summit Hotel and Piper Sandler 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 Piper Sandler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Piper Sandler.
Diversification Opportunities for Summit Hotel and Piper Sandler
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Summit and Piper is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Piper Sandler Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piper Sandler Companies 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 Piper Sandler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piper Sandler Companies has no effect on the direction of Summit Hotel i.e., Summit Hotel and Piper Sandler go up and down completely randomly.
Pair Corralation between Summit Hotel and Piper Sandler
Assuming the 90 days horizon Summit Hotel is expected to generate 4.11 times less return on investment than Piper Sandler. But when comparing it to its historical volatility, Summit Hotel Properties is 1.24 times less risky than Piper Sandler. It trades about 0.04 of its potential returns per unit of risk. Piper Sandler Companies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 13,909 in Piper Sandler Companies on September 14, 2024 and sell it today you would earn a total of 16,291 from holding Piper Sandler Companies or generate 117.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Summit Hotel Properties vs. Piper Sandler Companies
Performance |
| Timeline |
| Summit Hotel Properties |
| Piper Sandler Companies |
Summit Hotel and Piper Sandler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Piper Sandler
The main advantage of trading using opposite Summit Hotel and Piper Sandler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Piper Sandler 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 Piper Sandler will offset losses from the drop in Piper Sandler'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 |
| Piper Sandler vs. Summit Hotel Properties | Piper Sandler vs. STMicroelectronics NV | Piper Sandler vs. Wyndham Hotels Resorts | Piper Sandler vs. Dalata Hotel Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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