Correlation Between Sunstone Hotel and Singapore ReinsuranceLimit
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit 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 Singapore Reinsurance, you can compare the effects of market volatilities on Sunstone Hotel and Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Singapore ReinsuranceLimit.
Diversification Opportunities for Sunstone Hotel and Singapore ReinsuranceLimit
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunstone and Singapore is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore ReinsuranceLimit has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Singapore ReinsuranceLimit go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Singapore ReinsuranceLimit
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.4 times more return on investment than Singapore ReinsuranceLimit. However, Sunstone Hotel Investors is 2.51 times less risky than Singapore ReinsuranceLimit. It trades about -0.24 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about -0.2 per unit of risk. If you would invest 1,090 in Sunstone Hotel Investors on November 27, 2024 and sell it today you would lose (90.00) from holding Sunstone Hotel Investors or give up 8.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Singapore Reinsurance
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Singapore ReinsuranceLimit |
Sunstone Hotel and Singapore ReinsuranceLimit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Singapore ReinsuranceLimit
The main advantage of trading using opposite Sunstone Hotel and Singapore ReinsuranceLimit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit will offset losses from the drop in Singapore ReinsuranceLimit's long position.| Sunstone Hotel vs. NTT DATA | Sunstone Hotel vs. Alibaba Health Information | Sunstone Hotel vs. SILVER BULLET DATA | Sunstone Hotel vs. EITZEN CHEMICALS |
| Singapore ReinsuranceLimit vs. BE Semiconductor Industries | Singapore ReinsuranceLimit vs. LEONS FURNITURE | Singapore ReinsuranceLimit vs. ON Semiconductor | Singapore ReinsuranceLimit vs. CAIRN HOMES EO |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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