Correlation Between Genfit SA and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Genfit SA 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 Genfit SA and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit SA and Summit Hotel Properties, you can compare the effects of market volatilities on Genfit SA 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 Genfit SA with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit SA and Summit Hotel.
Diversification Opportunities for Genfit SA and Summit Hotel
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genfit and Summit is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Genfit SA 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 Genfit SA 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 Genfit SA 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 Genfit SA i.e., Genfit SA and Summit Hotel go up and down completely randomly.
Pair Corralation between Genfit SA and Summit Hotel
Assuming the 90 days trading horizon Genfit SA is expected to under-perform the Summit Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Genfit SA is 1.35 times less risky than Summit Hotel. The stock trades about -0.45 of its potential returns per unit of risk. The Summit Hotel Properties is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Summit Hotel Properties on September 20, 2024 and sell it today you would earn a total of 80.00 from holding Summit Hotel Properties or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Genfit SA vs. Summit Hotel Properties
Performance |
| Timeline |
| Genfit SA |
| Summit Hotel Properties |
Genfit SA and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit SA and Summit Hotel
The main advantage of trading using opposite Genfit SA and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit SA 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.| Genfit SA vs. BORR DRILLING NEW | Genfit SA vs. Brockhaus Capital Management | Genfit SA vs. FIREWEED METALS P | Genfit SA vs. Major Drilling Group |
| Summit Hotel vs. Titan Machinery | Summit Hotel vs. Sterling Construction | Summit Hotel vs. Hanison Construction Holdings | Summit Hotel vs. Dairy Farm International |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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