Correlation Between Sunstone Hotel and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and SPDR Gold 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 SPDR Gold 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 SPDR Gold Shares, you can compare the effects of market volatilities on Sunstone Hotel and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and SPDR Gold.
Diversification Opportunities for Sunstone Hotel and SPDR Gold
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunstone and SPDR is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and SPDR Gold go up and down completely randomly.
Pair Corralation between Sunstone Hotel and SPDR Gold
Assuming the 90 days horizon Sunstone Hotel is expected to generate 1.32 times less return on investment than SPDR Gold. In addition to that, Sunstone Hotel is 1.85 times more volatile than SPDR Gold Shares. It trades about 0.06 of its total potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.15 per unit of volatility. If you would invest 17,216 in SPDR Gold Shares on September 14, 2024 and sell it today you would earn a total of 6,427 from holding SPDR Gold Shares or generate 37.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. SPDR Gold Shares
Performance |
| Timeline |
| Sunstone Hotel Investors |
| SPDR Gold Shares |
Sunstone Hotel and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and SPDR Gold
The main advantage of trading using opposite Sunstone Hotel and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold'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 |
| SPDR Gold vs. USWE SPORTS AB | SPDR Gold vs. ePlay Digital | SPDR Gold vs. TITANIUM TRANSPORTGROUP | SPDR Gold vs. Sixt Leasing SE |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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