Correlation Between Summit Hotel and INTNED

Can any of the company-specific risk be diversified away by investing in both Summit Hotel and INTNED 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 INTNED 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 INTNED 14 01 JUL 26, you can compare the effects of market volatilities on Summit Hotel and INTNED 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 INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and INTNED.

Diversification Opportunities for Summit Hotel and INTNED

-0.34

Correlation Coefficient

Summit Hotel  INTNED

Very good diversification

The 3 months correlation between Summit and INTNED is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and INTNED 14 01 JUL 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 14 01 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 INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 14 01 has no effect on the direction of Summit Hotel i.e., Summit Hotel and INTNED go up and down completely randomly.

Pair Corralation between Summit Hotel and INTNED

Considering the 90-day investment horizon Summit Hotel is expected to generate 2.05 times less return on investment than INTNED. In addition to that, Summit Hotel is 1.96 times more volatile than INTNED 14 01 JUL 26. It trades about 0.0 of its total potential returns per unit of risk. INTNED 14 01 JUL 26 is currently generating about 0.0 per unit of volatility. If you would invest  9,118  in INTNED 14 01 JUL 26 on September 19, 2024 and sell it today you would lose (23.00) from holding INTNED 14 01 JUL 26 or give up 0.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	41.47%
Values	Daily Returns

Summit Hotel Properties  vs.  INTNED 14 01 JUL 26

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 recent stock price disarray, may contribute to short-term losses for the investors.

INTNED 14 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 14 01 JUL 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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 INTNED 14 01 JUL 26 investors.

Pair Trading with Summit Hotel and INTNED

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

The idea behind Summit Hotel Properties and INTNED 14 01 JUL 26 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.