Correlation Between Summit Hotel and STANLEY ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and STANLEY ELECTRIC 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 STANLEY ELECTRIC 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 STANLEY ELECTRIC CO, you can compare the effects of market volatilities on Summit Hotel and STANLEY ELECTRIC 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 STANLEY ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and STANLEY ELECTRIC.
Diversification Opportunities for Summit Hotel and STANLEY ELECTRIC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and STANLEY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and STANLEY ELECTRIC CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANLEY ELECTRIC 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 STANLEY ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANLEY ELECTRIC has no effect on the direction of Summit Hotel i.e., Summit Hotel and STANLEY ELECTRIC go up and down completely randomly.
Pair Corralation between Summit Hotel and STANLEY ELECTRIC
If you would invest 562.00 in Summit Hotel Properties on August 30, 2024 and sell it today you would earn a total of 53.00 from holding Summit Hotel Properties or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. STANLEY ELECTRIC CO
Performance |
| Timeline |
| Summit Hotel Properties |
| STANLEY ELECTRIC |
Summit Hotel and STANLEY ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and STANLEY ELECTRIC
The main advantage of trading using opposite Summit Hotel and STANLEY ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, STANLEY ELECTRIC 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 STANLEY ELECTRIC will offset losses from the drop in STANLEY ELECTRIC's long position.| Summit Hotel vs. ADRIATIC METALS LS 013355 | Summit Hotel vs. Granite Construction | Summit Hotel vs. DAIRY FARM INTL | Summit Hotel vs. American Eagle Outfitters |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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