Correlation Between Sunstone Hotel and Rubis SCA
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Rubis SCA 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 Rubis SCA 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 Rubis SCA, you can compare the effects of market volatilities on Sunstone Hotel and Rubis SCA 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 Rubis SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Rubis SCA.
Diversification Opportunities for Sunstone Hotel and Rubis SCA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunstone and Rubis is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Rubis SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubis SCA 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 Rubis SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubis SCA has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Rubis SCA go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Rubis SCA
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 2.22 times more return on investment than Rubis SCA. However, Sunstone Hotel is 2.22 times more volatile than Rubis SCA. It trades about 0.25 of its potential returns per unit of risk. Rubis SCA is currently generating about 0.25 per unit of risk. If you would invest 1,020 in Sunstone Hotel Investors on October 1, 2024 and sell it today you would earn a total of 120.00 from holding Sunstone Hotel Investors or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Rubis SCA
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Rubis SCA |
Sunstone Hotel and Rubis SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Rubis SCA
The main advantage of trading using opposite Sunstone Hotel and Rubis SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Rubis SCA 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 Rubis SCA will offset losses from the drop in Rubis SCA's long position.| Sunstone Hotel vs. AIR LIQUIDE ADR | Sunstone Hotel vs. Westinghouse Air Brake | Sunstone Hotel vs. Transport International Holdings | Sunstone Hotel vs. COLUMBIA SPORTSWEAR |
| Rubis SCA vs. United Breweries Co | Rubis SCA vs. Perdoceo Education | Rubis SCA vs. Molson Coors Beverage | Rubis SCA vs. Fevertree Drinks PLC |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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