Correlation Between Summit Hotel and Corporate Office
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on Summit Hotel and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Corporate Office.
Diversification Opportunities for Summit Hotel and Corporate Office
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Summit and Corporate is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of Summit Hotel i.e., Summit Hotel and Corporate Office go up and down completely randomly.
Pair Corralation between Summit Hotel and Corporate Office
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 1.09 times more return on investment than Corporate Office. However, Summit Hotel is 1.09 times more volatile than Corporate Office Properties. It trades about 0.07 of its potential returns per unit of risk. Corporate Office Properties is currently generating about -0.29 per unit of risk. If you would invest 630.00 in Summit Hotel Properties on October 14, 2024 and sell it today you would earn a total of 10.00 from holding Summit Hotel Properties or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Hotel Properties vs. Corporate Office Properties
Performance |
| Timeline |
| Summit Hotel Properties |
| Corporate Office Pro |
Summit Hotel and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and Corporate Office
The main advantage of trading using opposite Summit Hotel and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| Summit Hotel vs. Playa Hotels Resorts | Summit Hotel vs. Columbia Sportswear | Summit Hotel vs. InPlay Oil Corp | Summit Hotel vs. Playtech plc |
| Corporate Office vs. Nippon Steel | Corporate Office vs. Summit Hotel Properties | Corporate Office vs. DONGJIANG ENVIRONMENTAL H | Corporate Office vs. Xiwang Special Steel |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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