Correlation Between Transportadora and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Sunstone Hotel Investors, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Sunstone Hotel.
Diversification Opportunities for Transportadora and Sunstone Hotel
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and Sunstone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas 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 Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Transportadora and Sunstone Hotel
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 2.46 times more return on investment than Sunstone Hotel. However, Transportadora is 2.46 times more volatile than Sunstone Hotel Investors. It trades about 0.08 of its potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.02 per unit of risk. If you would invest 840.00 in Transportadora de Gas on September 3, 2024 and sell it today you would earn a total of 2,020 from holding Transportadora de Gas or generate 240.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Transportadora de Gas |
| Sunstone Hotel Investors |
Transportadora and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Sunstone Hotel
The main advantage of trading using opposite Transportadora and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. COPLAND ROAD CAPITAL | Transportadora vs. H FARM SPA | Transportadora vs. BII Railway Transportation | Transportadora vs. Penta Ocean Construction Co |
| Sunstone Hotel vs. Transport International Holdings | Sunstone Hotel vs. Transportadora de Gas | Sunstone Hotel vs. IMPERIAL TOBACCO | Sunstone Hotel vs. BII Railway Transportation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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