Correlation Between Sunstone Hotel and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on Sunstone Hotel and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and COLUMBIA SPORTSWEAR.
Diversification Opportunities for Sunstone Hotel and COLUMBIA SPORTSWEAR
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and COLUMBIA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLUMBIA SPORTSWEAR has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between Sunstone Hotel and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 1.72 times more return on investment than COLUMBIA SPORTSWEAR. However, Sunstone Hotel is 1.72 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.22 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.26 per unit of risk. If you would invest 1,020 in Sunstone Hotel Investors on September 12, 2024 and sell it today you would earn a total of 140.00 from holding Sunstone Hotel Investors or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| Sunstone Hotel Investors |
| COLUMBIA SPORTSWEAR |
Sunstone Hotel and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite Sunstone Hotel and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR will offset losses from the drop in COLUMBIA SPORTSWEAR'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 |
| COLUMBIA SPORTSWEAR vs. Apple Inc | COLUMBIA SPORTSWEAR vs. Apple Inc | COLUMBIA SPORTSWEAR vs. Apple Inc | COLUMBIA SPORTSWEAR vs. Apple Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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