Correlation Between Sunstone Hotel and Service Properties
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Service Properties 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 Service Properties 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 Service Properties Trust, you can compare the effects of market volatilities on Sunstone Hotel and Service Properties 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 Service Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Service Properties.
Diversification Opportunities for Sunstone Hotel and Service Properties
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunstone and Service is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Service Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Properties Trust 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 Service Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Properties Trust has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Service Properties go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Service Properties
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.51 times more return on investment than Service Properties. However, Sunstone Hotel Investors is 1.98 times less risky than Service Properties. It trades about 0.14 of its potential returns per unit of risk. Service Properties Trust is currently generating about 0.02 per unit of risk. If you would invest 928.00 in Sunstone Hotel Investors on November 1, 2024 and sell it today you would earn a total of 162.00 from holding Sunstone Hotel Investors or generate 17.46% 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. Service Properties Trust
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Service Properties Trust |
Sunstone Hotel and Service Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Service Properties
The main advantage of trading using opposite Sunstone Hotel and Service Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Service Properties 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 Service Properties will offset losses from the drop in Service Properties' long position.| Sunstone Hotel vs. Hemisphere Energy Corp | Sunstone Hotel vs. AECOM TECHNOLOGY | Sunstone Hotel vs. Kingdee International Software | Sunstone Hotel vs. MACOM Technology Solutions |
| Service Properties vs. Host Hotels Resorts | Service Properties vs. Sunstone Hotel Investors | Service Properties vs. Xenia Hotels Resorts | Service Properties vs. Summit Hotel Properties |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |