Correlation Between Sunstone Hotel and Konica Minolta
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Konica Minolta 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 Konica Minolta 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 Konica Minolta, you can compare the effects of market volatilities on Sunstone Hotel and Konica Minolta 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 Konica Minolta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Konica Minolta.
Diversification Opportunities for Sunstone Hotel and Konica Minolta
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and Konica is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta 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 Konica Minolta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konica Minolta has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Konica Minolta go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Konica Minolta
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 1.39 times more return on investment than Konica Minolta. However, Sunstone Hotel is 1.39 times more volatile than Konica Minolta. It trades about 0.29 of its potential returns per unit of risk. Konica Minolta is currently generating about 0.06 per unit of risk. If you would invest 985.00 in Sunstone Hotel Investors on September 14, 2024 and sell it today you would earn a total of 175.00 from holding Sunstone Hotel Investors or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Konica Minolta
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Konica Minolta |
Sunstone Hotel and Konica Minolta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Konica Minolta
The main advantage of trading using opposite Sunstone Hotel and Konica Minolta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Konica Minolta 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 Konica Minolta will offset losses from the drop in Konica Minolta'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 |
| Konica Minolta vs. OURGAME INTHOLDL 00005 | Konica Minolta vs. Sims Metal Management | Konica Minolta vs. Games Workshop Group | Konica Minolta vs. HOCHSCHILD MINING |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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