Correlation Between Sunstone Hotel and MICRONIC MYDATA
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and MICRONIC MYDATA 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 MICRONIC MYDATA 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 MICRONIC MYDATA, you can compare the effects of market volatilities on Sunstone Hotel and MICRONIC MYDATA 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 MICRONIC MYDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and MICRONIC MYDATA.
Diversification Opportunities for Sunstone Hotel and MICRONIC MYDATA
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunstone and MICRONIC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and MICRONIC MYDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRONIC MYDATA 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 MICRONIC MYDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRONIC MYDATA has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and MICRONIC MYDATA go up and down completely randomly.
Pair Corralation between Sunstone Hotel and MICRONIC MYDATA
Assuming the 90 days horizon Sunstone Hotel Investors is expected to under-perform the MICRONIC MYDATA. But the stock apears to be less risky and, when comparing its historical volatility, Sunstone Hotel Investors is 2.27 times less risky than MICRONIC MYDATA. The stock trades about -0.2 of its potential returns per unit of risk. The MICRONIC MYDATA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,554 in MICRONIC MYDATA on October 17, 2024 and sell it today you would earn a total of 118.00 from holding MICRONIC MYDATA or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. MICRONIC MYDATA
Performance |
| Timeline |
| Sunstone Hotel Investors |
| MICRONIC MYDATA |
Sunstone Hotel and MICRONIC MYDATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and MICRONIC MYDATA
The main advantage of trading using opposite Sunstone Hotel and MICRONIC MYDATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, MICRONIC MYDATA 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 MICRONIC MYDATA will offset losses from the drop in MICRONIC MYDATA's long position.| Sunstone Hotel vs. Electronic Arts | Sunstone Hotel vs. INTERSHOP Communications Aktiengesellschaft | Sunstone Hotel vs. Ribbon Communications | Sunstone Hotel vs. CRISPR Therapeutics AG |
| MICRONIC MYDATA vs. AIR PRODCHEMICALS | MICRONIC MYDATA vs. X FAB Silicon Foundries | MICRONIC MYDATA vs. SILICON LABORATOR | MICRONIC MYDATA vs. Sunstone Hotel Investors |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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