Correlation Between Sunstone Hotel and Apple
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Sunstone Hotel and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Apple.
Diversification Opportunities for Sunstone Hotel and Apple
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sunstone and Apple is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Apple go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Apple
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 2.99 times more return on investment than Apple. However, Sunstone Hotel is 2.99 times more volatile than Apple Inc. It trades about 0.29 of its potential returns per unit of risk. Apple Inc is currently generating about 0.61 per unit of risk. If you would invest 985.00 in Sunstone Hotel Investors on September 13, 2024 and sell it today you would earn a total of 175.00 from holding Sunstone Hotel Investors or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Apple Inc
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Apple Inc |
Sunstone Hotel and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Apple
The main advantage of trading using opposite Sunstone Hotel and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple'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 |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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