Correlation Between Summit Hotel and HUNTINGTON

Can any of the company-specific risk be diversified away by investing in both Summit Hotel and HUNTINGTON 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 HUNTINGTON 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 HUNTINGTON BANCSHARES INC, you can compare the effects of market volatilities on Summit Hotel and HUNTINGTON 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 HUNTINGTON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and HUNTINGTON.

Diversification Opportunities for Summit Hotel and HUNTINGTON

-0.31

Correlation Coefficient

Summit Hotel  HUNTINGTON

Very good diversification

The 3 months correlation between Summit and HUNTINGTON is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and HUNTINGTON BANCSHARES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUNTINGTON BANCSHARES INC 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 HUNTINGTON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUNTINGTON BANCSHARES INC has no effect on the direction of Summit Hotel i.e., Summit Hotel and HUNTINGTON go up and down completely randomly.

Pair Corralation between Summit Hotel and HUNTINGTON

Considering the 90-day investment horizon Summit Hotel Properties is expected to generate 2.39 times more return on investment than HUNTINGTON. However, Summit Hotel is 2.39 times more volatile than HUNTINGTON BANCSHARES INC. It trades about 0.0 of its potential returns per unit of risk. HUNTINGTON BANCSHARES INC is currently generating about -0.17 per unit of risk. If you would invest  690.00  in Summit Hotel Properties on September 24, 2024 and sell it today you would lose (8.00) from holding Summit Hotel Properties or give up 1.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Summit Hotel Properties  vs.  HUNTINGTON BANCSHARES INC

Summit Hotel Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Summit Hotel Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Summit Hotel is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

HUNTINGTON BANCSHARES INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUNTINGTON BANCSHARES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUNTINGTON BANCSHARES INC investors.

Pair Trading with Summit Hotel and HUNTINGTON

The main advantage of trading using opposite Summit Hotel and HUNTINGTON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, HUNTINGTON 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 HUNTINGTON will offset losses from the drop in HUNTINGTON's long position.

The idea behind Summit Hotel Properties and HUNTINGTON BANCSHARES INC 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.