Correlation Between Sunstone Hotel and American Public
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and American Public 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 American Public 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 American Public Education, you can compare the effects of market volatilities on Sunstone Hotel and American Public 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 American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and American Public.
Diversification Opportunities for Sunstone Hotel and American Public
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and American is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education 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 American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and American Public go up and down completely randomly.
Pair Corralation between Sunstone Hotel and American Public
Assuming the 90 days horizon Sunstone Hotel Investors is expected to under-perform the American Public. But the stock apears to be less risky and, when comparing its historical volatility, Sunstone Hotel Investors is 1.88 times less risky than American Public. The stock trades about -0.21 of its potential returns per unit of risk. The American Public Education is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,020 in American Public Education on November 7, 2024 and sell it today you would earn a total of 60.00 from holding American Public Education or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. American Public Education
Performance |
| Timeline |
| Sunstone Hotel Investors |
| American Public Education |
Sunstone Hotel and American Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and American Public
The main advantage of trading using opposite Sunstone Hotel and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, American Public 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 American Public will offset losses from the drop in American Public's long position.| Sunstone Hotel vs. MUTUIONLINE | Sunstone Hotel vs. SWISS WATER DECAFFCOFFEE | Sunstone Hotel vs. TYSON FOODS A | Sunstone Hotel vs. TreeHouse Foods |
| American Public vs. BRIT AMER TOBACCO | American Public vs. Sunstone Hotel Investors | American Public vs. Cellnex Telecom SA | American Public vs. Xenia Hotels Resorts |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |