Correlation Between Sunstone Hotel and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Scientific Games 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 Scientific Games 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 Scientific Games, you can compare the effects of market volatilities on Sunstone Hotel and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Scientific Games.
Diversification Opportunities for Sunstone Hotel and Scientific Games
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunstone and Scientific is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Scientific Games go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Scientific Games
Assuming the 90 days horizon Sunstone Hotel is expected to generate 1.79 times less return on investment than Scientific Games. But when comparing it to its historical volatility, Sunstone Hotel Investors is 1.26 times less risky than Scientific Games. It trades about 0.03 of its potential returns per unit of risk. Scientific Games is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,150 in Scientific Games on October 31, 2024 and sell it today you would earn a total of 2,100 from holding Scientific Games or generate 34.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Scientific Games
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Scientific Games |
Sunstone Hotel and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Scientific Games
The main advantage of trading using opposite Sunstone Hotel and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| Sunstone Hotel vs. Iridium Communications | Sunstone Hotel vs. CAIRN HOMES EO | Sunstone Hotel vs. Taylor Morrison Home | Sunstone Hotel vs. Highlight Communications AG |
| Scientific Games vs. THAI BEVERAGE | Scientific Games vs. Direct Line Insurance | Scientific Games vs. High Liner Foods | Scientific Games vs. ZURICH INSURANCE GROUP |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |