Correlation Between Sunstone Hotel and TIANDE CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL, you can compare the effects of market volatilities on Sunstone Hotel and TIANDE CHEMICAL 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 TIANDE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and TIANDE CHEMICAL.
Diversification Opportunities for Sunstone Hotel and TIANDE CHEMICAL
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunstone and TIANDE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and TIANDE CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIANDE CHEMICAL 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 TIANDE CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIANDE CHEMICAL has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and TIANDE CHEMICAL go up and down completely randomly.
Pair Corralation between Sunstone Hotel and TIANDE CHEMICAL
If you would invest 925.00 in Sunstone Hotel Investors on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Sunstone Hotel Investors or generate 8.11% 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. TIANDE CHEMICAL
Performance |
| Timeline |
| Sunstone Hotel Investors |
| TIANDE CHEMICAL |
Sunstone Hotel and TIANDE CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and TIANDE CHEMICAL
The main advantage of trading using opposite Sunstone Hotel and TIANDE CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, TIANDE CHEMICAL 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 TIANDE CHEMICAL will offset losses from the drop in TIANDE CHEMICAL's long position.| Sunstone Hotel vs. Federal Agricultural Mortgage | Sunstone Hotel vs. THAI BEVERAGE | Sunstone Hotel vs. Monster Beverage Corp | Sunstone Hotel vs. Australian Agricultural |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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