Correlation Between Sunstone Hotel and Cooper Standard
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Cooper Standard 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 Cooper Standard 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 Cooper Standard Holdings, you can compare the effects of market volatilities on Sunstone Hotel and Cooper Standard 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 Cooper Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Cooper Standard.
Diversification Opportunities for Sunstone Hotel and Cooper Standard
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunstone and Cooper is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Cooper Standard Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Standard Holdings 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 Cooper Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Standard Holdings has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Cooper Standard go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Cooper Standard
Assuming the 90 days horizon Sunstone Hotel is expected to generate 2.58 times less return on investment than Cooper Standard. But when comparing it to its historical volatility, Sunstone Hotel Investors is 2.86 times less risky than Cooper Standard. It trades about 0.03 of its potential returns per unit of risk. Cooper Standard Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,170 in Cooper Standard Holdings on November 28, 2024 and sell it today you would earn a total of 220.00 from holding Cooper Standard Holdings or generate 18.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Cooper Standard Holdings
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Cooper Standard Holdings |
Sunstone Hotel and Cooper Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Cooper Standard
The main advantage of trading using opposite Sunstone Hotel and Cooper Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Cooper Standard 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 Cooper Standard will offset losses from the drop in Cooper Standard's long position.| Sunstone Hotel vs. COVIVIO HOTELS INH | Sunstone Hotel vs. MELIA HOTELS | Sunstone Hotel vs. AIR CHINA LTD | Sunstone Hotel vs. Xenia Hotels Resorts |
| Cooper Standard vs. United Rentals | Cooper Standard vs. Sixt Leasing SE | Cooper Standard vs. AviChina Industry Technology | Cooper Standard vs. FANDIFI TECHNOLOGY P |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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