Correlation Between Sunstone Hotel and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Sunstone Hotel and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Jacquet Metal.
Diversification Opportunities for Sunstone Hotel and Jacquet Metal
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and Jacquet is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Jacquet Metal go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Jacquet Metal
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.43 times more return on investment than Jacquet Metal. However, Sunstone Hotel Investors is 2.31 times less risky than Jacquet Metal. It trades about -0.09 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.23 per unit of risk. If you would invest 1,151 in Sunstone Hotel Investors on October 20, 2024 and sell it today you would lose (21.00) from holding Sunstone Hotel Investors or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Jacquet Metal Service
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Jacquet Metal Service |
Sunstone Hotel and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Jacquet Metal
The main advantage of trading using opposite Sunstone Hotel and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Sunstone Hotel vs. Columbia Sportswear | Sunstone Hotel vs. JD SPORTS FASH | Sunstone Hotel vs. Discover Financial Services | Sunstone Hotel vs. United Insurance Holdings |
| Jacquet Metal vs. H2O Retailing | Jacquet Metal vs. Burlington Stores | Jacquet Metal vs. PICKN PAY STORES | Jacquet Metal vs. Hyatt Hotels |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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