Correlation Between FrontView REIT, and Sunstone Hotel

Can any of the company-specific risk be diversified away by investing in both FrontView REIT, 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 FrontView REIT, and Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FrontView REIT, and Sunstone Hotel Investors, you can compare the effects of market volatilities on FrontView REIT, 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 FrontView REIT, with a short position of Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Sunstone Hotel.

Diversification Opportunities for FrontView REIT, and Sunstone Hotel

0.39

Correlation Coefficient

FrontView REIT,  Sunstone Hotel

Weak diversification

The 3 months correlation between FrontView and Sunstone is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, 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 FrontView REIT, 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 FrontView REIT, 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 FrontView REIT, i.e., FrontView REIT, and Sunstone Hotel go up and down completely randomly.

Pair Corralation between FrontView REIT, and Sunstone Hotel

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Sunstone Hotel. In addition to that, FrontView REIT, is 2.5 times more volatile than Sunstone Hotel Investors. It trades about -0.21 of its total potential returns per unit of risk. Sunstone Hotel Investors is currently generating about -0.11 per unit of volatility. If you would invest  2,216  in Sunstone Hotel Investors on December 30, 2024 and sell it today you would lose (142.00) from holding Sunstone Hotel Investors or give up 6.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

FrontView REIT,  vs.  Sunstone Hotel Investors

FrontView REIT,

Risk-Adjusted Performance

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sunstone Hotel Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunstone Hotel Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with FrontView REIT, and Sunstone Hotel

The main advantage of trading using opposite FrontView REIT, and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FrontView REIT, 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.

The idea behind FrontView REIT, and Sunstone Hotel Investors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.