Correlation Between Service Properties and InnSuites Hospitality
Can any of the company-specific risk be diversified away by investing in both Service Properties 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 Service Properties and InnSuites Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Service Properties Trust and InnSuites Hospitality Trust, you can compare the effects of market volatilities on Service Properties 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 Service Properties with a short position of InnSuites Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Service Properties and InnSuites Hospitality.
Diversification Opportunities for Service Properties and InnSuites Hospitality
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Service and InnSuites is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Service Properties Trust and InnSuites Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnSuites Hospitality and Service Properties 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 Service Properties Trust 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 Service Properties i.e., Service Properties and InnSuites Hospitality go up and down completely randomly.
Pair Corralation between Service Properties and InnSuites Hospitality
Considering the 90-day investment horizon Service Properties Trust is expected to under-perform the InnSuites Hospitality. In addition to that, Service Properties is 1.66 times more volatile than InnSuites Hospitality Trust. It trades about -0.21 of its total potential returns per unit of risk. InnSuites Hospitality Trust is currently generating about 0.26 per unit of volatility. 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 |
Service Properties Trust vs. InnSuites Hospitality Trust
Performance |
| Timeline |
| Service Properties Trust |
| InnSuites Hospitality |
Service Properties and InnSuites Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Service Properties and InnSuites Hospitality
The main advantage of trading using opposite Service Properties and InnSuites Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Service Properties 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.| Service Properties vs. Old Republic International | Service Properties vs. SBM Offshore NV | Service Properties vs. BW Offshore Limited | Service Properties vs. MGIC Investment Corp |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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