Correlation Between Sunstone Hotel and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and EastGroup Properties 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 EastGroup Properties 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 EastGroup Properties, you can compare the effects of market volatilities on Sunstone Hotel and EastGroup Properties 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 EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and EastGroup Properties.
Diversification Opportunities for Sunstone Hotel and EastGroup Properties
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunstone and EastGroup is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties 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 EastGroup Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EastGroup Properties has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and EastGroup Properties go up and down completely randomly.
Pair Corralation between Sunstone Hotel and EastGroup Properties
Considering the 90-day investment horizon Sunstone Hotel Investors is expected to under-perform the EastGroup Properties. But the stock apears to be less risky and, when comparing its historical volatility, Sunstone Hotel Investors is 1.34 times less risky than EastGroup Properties. The stock trades about -0.17 of its potential returns per unit of risk. The EastGroup Properties is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 16,057 in EastGroup Properties on October 25, 2024 and sell it today you would earn a total of 719.00 from holding EastGroup Properties or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. EastGroup Properties
Performance |
| Timeline |
| Sunstone Hotel Investors |
| EastGroup Properties |
Sunstone Hotel and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and EastGroup Properties
The main advantage of trading using opposite Sunstone Hotel and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, EastGroup Properties 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 EastGroup Properties will offset losses from the drop in EastGroup Properties' long position.| Sunstone Hotel vs. RLJ Lodging Trust | Sunstone Hotel vs. Pebblebrook Hotel Trust | Sunstone Hotel vs. Summit Hotel Properties | Sunstone Hotel vs. Ryman Hospitality Properties |
| EastGroup Properties vs. Terreno Realty | EastGroup Properties vs. Plymouth Industrial REIT | EastGroup Properties vs. LXP Industrial Trust | EastGroup Properties vs. First Industrial Realty |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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