Correlation Between Sunstone Hotel and NetApp
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and NetApp 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 NetApp 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 NetApp Inc, you can compare the effects of market volatilities on Sunstone Hotel and NetApp 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 NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and NetApp.
Diversification Opportunities for Sunstone Hotel and NetApp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and NetApp is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc 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 NetApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetApp Inc has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and NetApp go up and down completely randomly.
Pair Corralation between Sunstone Hotel and NetApp
Assuming the 90 days horizon Sunstone Hotel is expected to generate 4.14 times less return on investment than NetApp. But when comparing it to its historical volatility, Sunstone Hotel Investors is 1.31 times less risky than NetApp. It trades about 0.02 of its potential returns per unit of risk. NetApp Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,776 in NetApp Inc on September 4, 2024 and sell it today you would earn a total of 5,678 from holding NetApp Inc or generate 98.3% 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. NetApp Inc
Performance |
| Timeline |
| Sunstone Hotel Investors |
| NetApp Inc |
Sunstone Hotel and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and NetApp
The main advantage of trading using opposite Sunstone Hotel and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, NetApp 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 NetApp will offset losses from the drop in NetApp'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 |
| NetApp vs. Teradata Corp | NetApp vs. Superior Plus Corp | NetApp vs. NMI Holdings | NetApp vs. Origin Agritech |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |