Correlation Between Shionogi and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Shionogi and Sunstone Hotel 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 Shionogi and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shionogi Co and Sunstone Hotel Investors, you can compare the effects of market volatilities on Shionogi and Sunstone Hotel 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 Shionogi with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shionogi and Sunstone Hotel.
Diversification Opportunities for Shionogi and Sunstone Hotel
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shionogi and Sunstone is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shionogi Co and Sunstone Hotel Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunstone Hotel Investors and Shionogi 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 Shionogi Co are associated (or correlated) with Sunstone Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunstone Hotel Investors has no effect on the direction of Shionogi i.e., Shionogi and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Shionogi and Sunstone Hotel
Assuming the 90 days horizon Shionogi Co is expected to under-perform the Sunstone Hotel. In addition to that, Shionogi is 1.34 times more volatile than Sunstone Hotel Investors. It trades about -0.02 of its total potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.04 per unit of volatility. If you would invest 933.00 in Sunstone Hotel Investors on November 9, 2024 and sell it today you would earn a total of 117.00 from holding Sunstone Hotel Investors or generate 12.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shionogi Co vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Shionogi |
| Sunstone Hotel Investors |
Shionogi and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shionogi and Sunstone Hotel
The main advantage of trading using opposite Shionogi and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shionogi position performs unexpectedly, Sunstone Hotel 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 Sunstone Hotel will offset losses from the drop in Sunstone Hotel's long position.| Shionogi vs. ZURICH INSURANCE GROUP | Shionogi vs. Vienna Insurance Group | Shionogi vs. PURETECH HEALTH PLC | Shionogi vs. HANOVER INSURANCE |
| Sunstone Hotel vs. Host Hotels Resorts | Sunstone Hotel vs. Ryman Hospitality Properties | Sunstone Hotel vs. Park Hotels Resorts | Sunstone Hotel vs. Pebblebrook Hotel Trust |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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