Correlation Between Sunstone Hotel and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on Sunstone Hotel and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and NTG Nordic.
Diversification Opportunities for Sunstone Hotel and NTG Nordic
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunstone and NTG is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and NTG Nordic go up and down completely randomly.
Pair Corralation between Sunstone Hotel and NTG Nordic
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 2.15 times more return on investment than NTG Nordic. However, Sunstone Hotel is 2.15 times more volatile than NTG Nordic Transport. It trades about 0.22 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.16 per unit of risk. If you would invest 1,020 in Sunstone Hotel Investors on September 12, 2024 and sell it today you would earn a total of 140.00 from holding Sunstone Hotel Investors or generate 13.73% 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. NTG Nordic Transport
Performance |
| Timeline |
| Sunstone Hotel Investors |
| NTG Nordic Transport |
Sunstone Hotel and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and NTG Nordic
The main advantage of trading using opposite Sunstone Hotel and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic'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 |
| NTG Nordic vs. Gold Road Resources | NTG Nordic vs. FORMPIPE SOFTWARE AB | NTG Nordic vs. GOLD ROAD RES | NTG Nordic vs. Broadcom |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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