Correlation Between Sotherly Hotels and InnSuites Hospitality
Can any of the company-specific risk be diversified away by investing in both Sotherly Hotels and InnSuites Hospitality 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 Sotherly Hotels and InnSuites Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sotherly Hotels PR and InnSuites Hospitality Trust, you can compare the effects of market volatilities on Sotherly Hotels and InnSuites Hospitality 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 Sotherly Hotels with a short position of InnSuites Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotherly Hotels and InnSuites Hospitality.
Diversification Opportunities for Sotherly Hotels and InnSuites Hospitality
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sotherly and InnSuites is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sotherly Hotels PR and InnSuites Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnSuites Hospitality and Sotherly Hotels 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 Sotherly Hotels PR are associated (or correlated) with InnSuites Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnSuites Hospitality has no effect on the direction of Sotherly Hotels i.e., Sotherly Hotels and InnSuites Hospitality go up and down completely randomly.
Pair Corralation between Sotherly Hotels and InnSuites Hospitality
Assuming the 90 days horizon Sotherly Hotels PR is expected to under-perform the InnSuites Hospitality. But the preferred stock apears to be less risky and, when comparing its historical volatility, Sotherly Hotels PR is 1.94 times less risky than InnSuites Hospitality. The preferred stock trades about -0.23 of its potential returns per unit of risk. The InnSuites Hospitality Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 189.00 in InnSuites Hospitality Trust on August 29, 2024 and sell it today you would earn a total of 28.00 from holding InnSuites Hospitality Trust or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sotherly Hotels PR vs. InnSuites Hospitality Trust
Performance |
| Timeline |
| Sotherly Hotels PR |
| InnSuites Hospitality |
Sotherly Hotels and InnSuites Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotherly Hotels and InnSuites Hospitality
The main advantage of trading using opposite Sotherly Hotels and InnSuites Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotherly Hotels position performs unexpectedly, InnSuites Hospitality 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 InnSuites Hospitality will offset losses from the drop in InnSuites Hospitality's long position.| Sotherly Hotels vs. Summit Hotel Properties | Sotherly Hotels vs. Aquagold International | Sotherly Hotels vs. Morningstar Unconstrained Allocation | Sotherly Hotels vs. High Yield Municipal Fund |
| InnSuites Hospitality vs. Regional Health Properties | InnSuites Hospitality vs. SemiLEDS | InnSuites Hospitality vs. SunLink Health Systems | InnSuites Hospitality vs. Avalon Holdings |
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..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |