Correlation Between Summit Hotel and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Singapore Telecommunicatio 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 Singapore Telecommunicatio 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 Singapore Telecommunications Limited, you can compare the effects of market volatilities on Summit Hotel and Singapore Telecommunicatio 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 Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Singapore Telecommunicatio.
Diversification Opportunities for Summit Hotel and Singapore Telecommunicatio
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Summit and Singapore is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Summit Hotel i.e., Summit Hotel and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Summit Hotel and Singapore Telecommunicatio
Assuming the 90 days horizon Summit Hotel is expected to generate 2.17 times less return on investment than Singapore Telecommunicatio. In addition to that, Summit Hotel is 1.31 times more volatile than Singapore Telecommunications Limited. It trades about 0.02 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.04 per unit of volatility. If you would invest 163.00 in Singapore Telecommunications Limited on September 13, 2024 and sell it today you would earn a total of 52.00 from holding Singapore Telecommunications Limited or generate 31.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Singapore Telecommunications L
Performance |
| Timeline |
| Summit Hotel Properties |
| Singapore Telecommunicatio |
Summit Hotel and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Singapore Telecommunicatio
The main advantage of trading using opposite Summit Hotel and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Singapore Telecommunicatio 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 Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.| Summit Hotel vs. Host Hotels Resorts | Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Xenia Hotels Resorts | Summit Hotel vs. ASHFORD HOSPITTRUST |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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