Correlation Between Willscot Mobile and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Willscot Mobile and Summit 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 Willscot Mobile and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willscot Mobile Mini and Summit Hotel Properties, you can compare the effects of market volatilities on Willscot Mobile and Summit 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 Willscot Mobile with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willscot Mobile and Summit Hotel.
Diversification Opportunities for Willscot Mobile and Summit Hotel
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Willscot and Summit is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Willscot Mobile Mini and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties and Willscot Mobile 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 Willscot Mobile Mini are associated (or correlated) with Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Willscot Mobile i.e., Willscot Mobile and Summit Hotel go up and down completely randomly.
Pair Corralation between Willscot Mobile and Summit Hotel
Considering the 90-day investment horizon Willscot Mobile is expected to generate 1.76 times less return on investment than Summit Hotel. In addition to that, Willscot Mobile is 1.19 times more volatile than Summit Hotel Properties. It trades about 0.09 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.2 per unit of volatility. If you would invest 603.00 in Summit Hotel Properties on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Summit Hotel Properties or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willscot Mobile Mini vs. Summit Hotel Properties
Performance |
| Timeline |
| Willscot Mobile Mini |
| Summit Hotel Properties |
Willscot Mobile and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willscot Mobile and Summit Hotel
The main advantage of trading using opposite Willscot Mobile and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willscot Mobile position performs unexpectedly, Summit 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Willscot Mobile vs. HE Equipment Services | Willscot Mobile vs. GATX Corporation | Willscot Mobile vs. McGrath RentCorp | Willscot Mobile vs. Alta Equipment Group |
| Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Service Properties Trust | Summit Hotel vs. RLJ Lodging Trust |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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