Correlation Between Summit Hotel and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and TIMES CHINA 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 TIMES CHINA 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 TIMES CHINA HLDGS, you can compare the effects of market volatilities on Summit Hotel and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and TIMES CHINA.
Diversification Opportunities for Summit Hotel and TIMES CHINA
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and TIMES is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Summit Hotel i.e., Summit Hotel and TIMES CHINA go up and down completely randomly.
Pair Corralation between Summit Hotel and TIMES CHINA
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.22 times more return on investment than TIMES CHINA. However, Summit Hotel Properties is 4.46 times less risky than TIMES CHINA. It trades about -0.02 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.03 per unit of risk. If you would invest 650.00 in Summit Hotel Properties on November 4, 2024 and sell it today you would lose (5.00) from holding Summit Hotel Properties or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| Summit Hotel Properties |
| TIMES CHINA HLDGS |
Summit Hotel and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and TIMES CHINA
The main advantage of trading using opposite Summit Hotel and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| Summit Hotel vs. Motorcar Parts of | Summit Hotel vs. Warner Music Group | Summit Hotel vs. Grupo Carso SAB | Summit Hotel vs. Cogent Communications Holdings |
| TIMES CHINA vs. HOCHSCHILD MINING | TIMES CHINA vs. DETALION GAMES SA | TIMES CHINA vs. DXC Technology Co | TIMES CHINA vs. OURGAME INTHOLDL 00005 |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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