Correlation Between Sunstone Hotel and Service Properties
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Service 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 Service 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 Service Properties Trust, you can compare the effects of market volatilities on Sunstone Hotel and Service 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 Service Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Service Properties.
Diversification Opportunities for Sunstone Hotel and Service Properties
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunstone and Service is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Service Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Properties Trust 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 Service Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Properties Trust has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Service Properties go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Service Properties
Considering the 90-day investment horizon Sunstone Hotel Investors is expected to generate 0.46 times more return on investment than Service Properties. However, Sunstone Hotel Investors is 2.17 times less risky than Service Properties. It trades about 0.05 of its potential returns per unit of risk. Service Properties Trust is currently generating about -0.12 per unit of risk. If you would invest 997.00 in Sunstone Hotel Investors on August 28, 2024 and sell it today you would earn a total of 80.00 from holding Sunstone Hotel Investors or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Service Properties Trust
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Service Properties Trust |
Sunstone Hotel and Service Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Service Properties
The main advantage of trading using opposite Sunstone Hotel and Service Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Service 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 Service Properties will offset losses from the drop in Service 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 |
| Service Properties vs. National CineMedia | Service Properties vs. Dave Busters Entertainment | Service Properties vs. Spyre Therapeutics | Service Properties vs. Tscan Therapeutics |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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