Correlation Between Sunstone Hotel and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on Sunstone Hotel and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Airbus SE.
Diversification Opportunities for Sunstone Hotel and Airbus SE
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sunstone and Airbus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Airbus SE go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Airbus SE
Assuming the 90 days horizon Sunstone Hotel is expected to generate 1.11 times less return on investment than Airbus SE. In addition to that, Sunstone Hotel is 1.21 times more volatile than Airbus SE. It trades about 0.05 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.06 per unit of volatility. If you would invest 10,889 in Airbus SE on September 13, 2024 and sell it today you would earn a total of 5,107 from holding Airbus SE or generate 46.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Airbus SE
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Airbus SE |
Sunstone Hotel and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Airbus SE
The main advantage of trading using opposite Sunstone Hotel and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Sunstone Hotel vs. Host Hotels Resorts | Sunstone Hotel vs. Xenia Hotels Resorts | Sunstone Hotel vs. Summit Hotel Properties | Sunstone Hotel vs. ASHFORD HOSPITTRUST |
| Airbus SE vs. General Dynamics | Airbus SE vs. Superior Plus Corp | Airbus SE vs. Origin Agritech | Airbus SE vs. INTUITIVE SURGICAL |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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