Correlation Between Vastned Retail and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Sunstone Hotel 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 Vastned Retail and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Sunstone Hotel Investors, you can compare the effects of market volatilities on Vastned Retail and Sunstone Hotel 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 Vastned Retail with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Sunstone Hotel.
Diversification Opportunities for Vastned Retail and Sunstone Hotel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vastned and Sunstone is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Sunstone Hotel Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunstone Hotel Investors and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with Sunstone Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunstone Hotel Investors has no effect on the direction of Vastned Retail i.e., Vastned Retail and Sunstone Hotel go up and down completely randomly.
Pair Corralation between Vastned Retail and Sunstone Hotel
Assuming the 90 days horizon Vastned Retail is expected to generate 1.3 times less return on investment than Sunstone Hotel. But when comparing it to its historical volatility, Vastned Retail NV is 1.24 times less risky than Sunstone Hotel. It trades about 0.04 of its potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 844.00 in Sunstone Hotel Investors on September 14, 2024 and sell it today you would earn a total of 316.00 from holding Sunstone Hotel Investors or generate 37.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. Sunstone Hotel Investors
Performance |
| Timeline |
| Vastned Retail NV |
| Sunstone Hotel Investors |
Vastned Retail and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Sunstone Hotel
The main advantage of trading using opposite Vastned Retail and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Sunstone Hotel 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 Sunstone Hotel will offset losses from the drop in Sunstone Hotel's long position.| Vastned Retail vs. Vicinity Centres | Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI Holdings | Vastned Retail vs. SIVERS SEMICONDUCTORS AB |
| Sunstone Hotel vs. Host Hotels Resorts | Sunstone Hotel vs. Xenia Hotels Resorts | Sunstone Hotel vs. Summit Hotel Properties | Sunstone Hotel vs. ASHFORD HOSPITTRUST |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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