Correlation Between Sunstone Hotel and First Majestic
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and First Majestic 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 First Majestic 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 First Majestic Silver, you can compare the effects of market volatilities on Sunstone Hotel and First Majestic 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 First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and First Majestic.
Diversification Opportunities for Sunstone Hotel and First Majestic
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunstone and First is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver 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 First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and First Majestic go up and down completely randomly.
Pair Corralation between Sunstone Hotel and First Majestic
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.63 times more return on investment than First Majestic. However, Sunstone Hotel Investors is 1.6 times less risky than First Majestic. It trades about 0.22 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.16 per unit of risk. If you would invest 935.00 in Sunstone Hotel Investors on September 23, 2024 and sell it today you would earn a total of 215.00 from holding Sunstone Hotel Investors or generate 22.99% 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. First Majestic Silver
Performance |
| Timeline |
| Sunstone Hotel Investors |
| First Majestic Silver |
Sunstone Hotel and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and First Majestic
The main advantage of trading using opposite Sunstone Hotel and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Sunstone Hotel vs. Host Hotels Resorts | Sunstone Hotel vs. Ryman Hospitality Properties | Sunstone Hotel vs. Park Hotels Resorts | Sunstone Hotel vs. Pebblebrook Hotel Trust |
| First Majestic vs. Pan American Silver | First Majestic vs. MAG Silver Corp | First Majestic vs. Silvercorp Metals | First Majestic vs. Endeavour Silver Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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