Correlation Between Summit Hotel and Bluerock Homes
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and Bluerock Homes 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 Summit Hotel and Bluerock Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Hotel Properties and Bluerock Homes Trust, you can compare the effects of market volatilities on Summit Hotel and Bluerock Homes 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 Summit Hotel with a short position of Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and Bluerock Homes.
Diversification Opportunities for Summit Hotel and Bluerock Homes
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Summit and Bluerock is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust and Summit Hotel 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 Summit Hotel Properties are associated (or correlated) with Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Summit Hotel i.e., Summit Hotel and Bluerock Homes go up and down completely randomly.
Pair Corralation between Summit Hotel and Bluerock Homes
Considering the 90-day investment horizon Summit Hotel Properties is expected to under-perform the Bluerock Homes. In addition to that, Summit Hotel is 1.39 times more volatile than Bluerock Homes Trust. It trades about -0.18 of its total potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.12 per unit of volatility. If you would invest 1,309 in Bluerock Homes Trust on December 28, 2024 and sell it today you would lose (132.00) from holding Bluerock Homes Trust or give up 10.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Summit Hotel Properties vs. Bluerock Homes Trust
Performance |
Timeline |
Summit Hotel Properties |
Bluerock Homes Trust |
Summit Hotel and Bluerock Homes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Summit Hotel and Bluerock Homes
The main advantage of trading using opposite Summit Hotel and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, Bluerock Homes 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 Bluerock Homes will offset losses from the drop in Bluerock Homes' long position.Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. RLJ Lodging Trust | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Sunstone Hotel Investors |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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