Correlation Between Willamette Valley and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Willamette Valley 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 Willamette Valley and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willamette Valley Vineyards and Summit Hotel Properties, you can compare the effects of market volatilities on Willamette Valley 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 Willamette Valley with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and Summit Hotel.
Diversification Opportunities for Willamette Valley and Summit Hotel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Willamette and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards 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 Willamette Valley 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 Willamette Valley Vineyards 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 Willamette Valley i.e., Willamette Valley and Summit Hotel go up and down completely randomly.
Pair Corralation between Willamette Valley and Summit Hotel
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the Summit Hotel. In addition to that, Willamette Valley is 1.06 times more volatile than Summit Hotel Properties. It trades about -0.08 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.05 per unit of volatility. If you would invest 522.00 in Summit Hotel Properties on September 12, 2024 and sell it today you would earn a total of 167.00 from holding Summit Hotel Properties or generate 31.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. Summit Hotel Properties
Performance |
| Timeline |
| Willamette Valley |
| Summit Hotel Properties |
Willamette Valley and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and Summit Hotel
The main advantage of trading using opposite Willamette Valley and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley 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.| Willamette Valley vs. Andrew Peller Limited | Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Willamette Valley Vineyards | Willamette Valley vs. Splash Beverage Group |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. RLJ Lodging Trust | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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