Correlation Between Sunstone Hotel and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel 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 Sunstone Hotel and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunstone Hotel Investors and Sunstone Hotel Investors, you can compare the effects of market volatilities on Sunstone Hotel 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 Sunstone Hotel with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Sunstone Hotel.
Diversification Opportunities for Sunstone Hotel and Sunstone Hotel
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and Sunstone is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors 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 Sunstone 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 Sunstone Hotel Investors 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 Sunstone Hotel i.e., Sunstone Hotel and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Sunstone Hotel
Assuming the 90 days trading horizon Sunstone Hotel Investors is expected to under-perform the Sunstone Hotel. But the preferred stock apears to be less risky and, when comparing its historical volatility, Sunstone Hotel Investors is 1.05 times less risky than Sunstone Hotel. The preferred stock trades about -0.32 of its potential returns per unit of risk. The Sunstone Hotel Investors is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest 2,195 in Sunstone Hotel Investors on November 3, 2024 and sell it today you would lose (141.00) from holding Sunstone Hotel Investors or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Sunstone Hotel Investors |
Sunstone Hotel and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Sunstone Hotel
The main advantage of trading using opposite Sunstone Hotel and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel 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.| Sunstone Hotel vs. Sunstone Hotel Investors | Sunstone Hotel vs. Pebblebrook Hotel Trust | Sunstone Hotel vs. DiamondRock Hospitality | Sunstone Hotel vs. Pebblebrook Hotel Trust |
| Sunstone Hotel vs. Sunstone Hotel Investors | Sunstone Hotel vs. Pebblebrook Hotel Trust | Sunstone Hotel vs. DiamondRock Hospitality | 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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