Correlation Between Sunstone Hotel and Transport International
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Transport International 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 Transport International 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 Transport International Holdings, you can compare the effects of market volatilities on Sunstone Hotel and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Transport International.
Diversification Opportunities for Sunstone Hotel and Transport International
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunstone and Transport is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Transport International go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Transport International
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.83 times more return on investment than Transport International. However, Sunstone Hotel Investors is 1.2 times less risky than Transport International. It trades about 0.2 of its potential returns per unit of risk. Transport International Holdings is currently generating about 0.03 per unit of risk. If you would invest 935.00 in Sunstone Hotel Investors on September 4, 2024 and sell it today you would earn a total of 85.00 from holding Sunstone Hotel Investors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Transport International Holdin
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Transport International |
Sunstone Hotel and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Transport International
The main advantage of trading using opposite Sunstone Hotel and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International'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 |
| Transport International vs. Superior Plus Corp | Transport International vs. NMI Holdings | Transport International vs. Origin Agritech | Transport International vs. SIVERS SEMICONDUCTORS AB |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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