Correlation Between Sunstone Hotel and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and BRAEMAR HOTELS 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 BRAEMAR HOTELS 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 BRAEMAR HOTELS RES, you can compare the effects of market volatilities on Sunstone Hotel and BRAEMAR HOTELS 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 BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and BRAEMAR HOTELS.
Diversification Opportunities for Sunstone Hotel and BRAEMAR HOTELS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and BRAEMAR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES 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 BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between Sunstone Hotel and BRAEMAR HOTELS
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.19 times more return on investment than BRAEMAR HOTELS. However, Sunstone Hotel Investors is 5.26 times less risky than BRAEMAR HOTELS. It trades about 0.07 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.15 per unit of risk. If you would invest 1,151 in Sunstone Hotel Investors on October 12, 2024 and sell it today you would earn a total of 9.00 from holding Sunstone Hotel Investors or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. BRAEMAR HOTELS RES
Performance |
| Timeline |
| Sunstone Hotel Investors |
| BRAEMAR HOTELS RES |
Sunstone Hotel and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and BRAEMAR HOTELS
The main advantage of trading using opposite Sunstone Hotel and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS's long position.| Sunstone Hotel vs. PARKEN Sport Entertainment | Sunstone Hotel vs. ATRESMEDIA | Sunstone Hotel vs. Ubisoft Entertainment SA | Sunstone Hotel vs. REMEDY ENTERTAINMENT OYJ |
| BRAEMAR HOTELS vs. Hua Hong Semiconductor | BRAEMAR HOTELS vs. DEVRY EDUCATION GRP | BRAEMAR HOTELS vs. TAL Education Group | BRAEMAR HOTELS vs. TOREX SEMICONDUCTOR LTD |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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