Correlation Between Sunstone Hotel and Zumtobel Group
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Zumtobel Group 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 Zumtobel Group 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 Zumtobel Group AG, you can compare the effects of market volatilities on Sunstone Hotel and Zumtobel Group 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 Zumtobel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Zumtobel Group.
Diversification Opportunities for Sunstone Hotel and Zumtobel Group
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunstone and Zumtobel is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Zumtobel Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumtobel Group AG 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 Zumtobel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumtobel Group AG has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Zumtobel Group go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Zumtobel Group
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 1.03 times more return on investment than Zumtobel Group. However, Sunstone Hotel is 1.03 times more volatile than Zumtobel Group AG. It trades about 0.04 of its potential returns per unit of risk. Zumtobel Group AG is currently generating about -0.03 per unit of risk. If you would invest 856.00 in Sunstone Hotel Investors on October 9, 2024 and sell it today you would earn a total of 284.00 from holding Sunstone Hotel Investors or generate 33.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Zumtobel Group AG
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Zumtobel Group AG |
Sunstone Hotel and Zumtobel Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Zumtobel Group
The main advantage of trading using opposite Sunstone Hotel and Zumtobel Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Zumtobel Group 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 Zumtobel Group will offset losses from the drop in Zumtobel Group's long position.| Sunstone Hotel vs. TAL Education Group | Sunstone Hotel vs. QUEEN S ROAD | Sunstone Hotel vs. Perdoceo Education | Sunstone Hotel vs. TITANIUM TRANSPORTGROUP |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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