Correlation Between Sunstone Hotel and THERMO FISHER
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and THERMO FISHER 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 THERMO FISHER 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 THERMO FISHER SCIEN, you can compare the effects of market volatilities on Sunstone Hotel and THERMO FISHER 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 THERMO FISHER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and THERMO FISHER.
Diversification Opportunities for Sunstone Hotel and THERMO FISHER
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunstone and THERMO is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and THERMO FISHER SCIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THERMO FISHER SCIEN 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 THERMO FISHER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THERMO FISHER SCIEN has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and THERMO FISHER go up and down completely randomly.
Pair Corralation between Sunstone Hotel and THERMO FISHER
Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 1.11 times more return on investment than THERMO FISHER. However, Sunstone Hotel is 1.11 times more volatile than THERMO FISHER SCIEN. It trades about 0.02 of its potential returns per unit of risk. THERMO FISHER SCIEN is currently generating about 0.0 per unit of risk. If you would invest 938.00 in Sunstone Hotel Investors on September 2, 2024 and sell it today you would earn a total of 62.00 from holding Sunstone Hotel Investors or generate 6.61% 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. THERMO FISHER SCIEN
Performance |
| Timeline |
| Sunstone Hotel Investors |
| THERMO FISHER SCIEN |
Sunstone Hotel and THERMO FISHER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and THERMO FISHER
The main advantage of trading using opposite Sunstone Hotel and THERMO FISHER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel position performs unexpectedly, THERMO FISHER 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 THERMO FISHER will offset losses from the drop in THERMO FISHER's long position.| Sunstone Hotel vs. Nippon Steel | Sunstone Hotel vs. VIAPLAY GROUP AB | Sunstone Hotel vs. ALGOMA STEEL GROUP | Sunstone Hotel vs. Perma Fix Environmental Services |
| THERMO FISHER vs. MHP Hotel AG | THERMO FISHER vs. METHODE ELECTRONICS | THERMO FISHER vs. Benchmark Electronics | THERMO FISHER vs. Sunstone Hotel Investors |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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