Correlation Between MINING PROJECTS and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both MINING PROJECTS 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 MINING PROJECTS and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MINING PROJECTS GRP and Sunstone Hotel Investors, you can compare the effects of market volatilities on MINING PROJECTS 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 MINING PROJECTS with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MINING PROJECTS and Sunstone Hotel.
Diversification Opportunities for MINING PROJECTS and Sunstone Hotel
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MINING and Sunstone is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MINING PROJECTS GRP 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 MINING PROJECTS 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 MINING PROJECTS GRP 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 MINING PROJECTS i.e., MINING PROJECTS and Sunstone Hotel go up and down completely randomly.
Pair Corralation between MINING PROJECTS and Sunstone Hotel
Assuming the 90 days trading horizon MINING PROJECTS GRP is expected to generate 4.14 times more return on investment than Sunstone Hotel. However, MINING PROJECTS is 4.14 times more volatile than Sunstone Hotel Investors. It trades about 0.06 of its potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.04 per unit of risk. If you would invest 0.65 in MINING PROJECTS GRP on September 3, 2024 and sell it today you would earn a total of 0.20 from holding MINING PROJECTS GRP or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MINING PROJECTS GRP vs. Sunstone Hotel Investors
Performance |
| Timeline |
| MINING PROJECTS GRP |
| Sunstone Hotel Investors |
MINING PROJECTS and Sunstone Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MINING PROJECTS and Sunstone Hotel
The main advantage of trading using opposite MINING PROJECTS and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MINING PROJECTS 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.| MINING PROJECTS vs. Norwegian Air Shuttle | MINING PROJECTS vs. HF SINCLAIR P | MINING PROJECTS vs. Mitsui Chemicals | MINING PROJECTS vs. Corsair Gaming |
| Sunstone Hotel vs. Transport International Holdings | Sunstone Hotel vs. Transportadora de Gas | Sunstone Hotel vs. IMPERIAL TOBACCO | Sunstone Hotel vs. BII Railway Transportation |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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