Correlation Between Sunstone Hotel and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Tyson Foods 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 Tyson Foods 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 Tyson Foods, you can compare the effects of market volatilities on Sunstone Hotel and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Tyson Foods.
Diversification Opportunities for Sunstone Hotel and Tyson Foods
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunstone and Tyson is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Tyson Foods go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Tyson Foods
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.64 times more return on investment than Tyson Foods. However, Sunstone Hotel Investors is 1.56 times less risky than Tyson Foods. It trades about -0.21 of its potential returns per unit of risk. Tyson Foods is currently generating about -0.24 per unit of risk. If you would invest 1,161 in Sunstone Hotel Investors on October 16, 2024 and sell it today you would lose (41.00) from holding Sunstone Hotel Investors or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Tyson Foods
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Tyson Foods |
Sunstone Hotel and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Tyson Foods
The main advantage of trading using opposite Sunstone Hotel and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Sunstone Hotel vs. ANGLO ASIAN MINING | Sunstone Hotel vs. Perseus Mining Limited | Sunstone Hotel vs. AIR PRODCHEMICALS | Sunstone Hotel vs. SEKISUI CHEMICAL |
| Tyson Foods vs. Adtalem Global Education | Tyson Foods vs. DeVry Education Group | Tyson Foods vs. American Public Education | Tyson Foods vs. WT OFFSHORE |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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