Correlation Between Summit Hotel and Peel Mining
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Peel Mining 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 Peel Mining 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 Peel Mining Limited, you can compare the effects of market volatilities on Summit Hotel and Peel Mining 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 Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Peel Mining.
Diversification Opportunities for Summit Hotel and Peel Mining
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and Peel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Peel Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining Limited 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 Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining Limited has no effect on the direction of Summit Hotel i.e., Summit Hotel and Peel Mining go up and down completely randomly.
Pair Corralation between Summit Hotel and Peel Mining
Assuming the 90 days horizon Summit Hotel is expected to generate 6.41 times less return on investment than Peel Mining. But when comparing it to its historical volatility, Summit Hotel Properties is 3.56 times less risky than Peel Mining. It trades about 0.02 of its potential returns per unit of risk. Peel Mining Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.35 in Peel Mining Limited on September 12, 2024 and sell it today you would lose (1.70) from holding Peel Mining Limited or give up 20.36% 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. Peel Mining Limited
Performance |
| Timeline |
| Summit Hotel Properties |
| Peel Mining Limited |
Summit Hotel and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Peel Mining
The main advantage of trading using opposite Summit Hotel and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining'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 |
| Peel Mining vs. Pebblebrook Hotel Trust | Peel Mining vs. Summit Hotel Properties | Peel Mining vs. Park Hotels Resorts | Peel Mining vs. ATRYS HEALTH SA |
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.
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