Correlation Between Summit Hotel and TREECOM
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and TREECOM 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 TREECOM 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 TREECOM, you can compare the effects of market volatilities on Summit Hotel and TREECOM 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 TREECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and TREECOM.
Diversification Opportunities for Summit Hotel and TREECOM
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and TREECOM is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and TREECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TREECOM 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 TREECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TREECOM has no effect on the direction of Summit Hotel i.e., Summit Hotel and TREECOM go up and down completely randomly.
Pair Corralation between Summit Hotel and TREECOM
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.55 times more return on investment than TREECOM. However, Summit Hotel Properties is 1.81 times less risky than TREECOM. It trades about 0.19 of its potential returns per unit of risk. TREECOM is currently generating about -0.21 per unit of risk. If you would invest 597.00 in Summit Hotel Properties on September 12, 2024 and sell it today you would earn a total of 53.00 from holding Summit Hotel Properties or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Summit Hotel Properties vs. TREECOM
Performance |
| Timeline |
| Summit Hotel Properties |
| TREECOM |
Summit Hotel and TREECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and TREECOM
The main advantage of trading using opposite Summit Hotel and TREECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, TREECOM 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 TREECOM will offset losses from the drop in TREECOM'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 |
| TREECOM vs. DATAGROUP SE | TREECOM vs. GALENA MINING LTD | TREECOM vs. MINCO SILVER | TREECOM vs. Zijin Mining 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |