Correlation Between NYSE Composite and Sotherly Hotels
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Sotherly Hotels 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 NYSE Composite and Sotherly Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sotherly Hotels Pref, you can compare the effects of market volatilities on NYSE Composite and Sotherly Hotels 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 NYSE Composite with a short position of Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sotherly Hotels.
Diversification Opportunities for NYSE Composite and Sotherly Hotels
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Sotherly is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Sotherly Hotels Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels Pref and NYSE Composite 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 NYSE Composite are associated (or correlated) with Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels Pref has no effect on the direction of NYSE Composite i.e., NYSE Composite and Sotherly Hotels go up and down completely randomly.
Pair Corralation between NYSE Composite and Sotherly Hotels
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Sotherly Hotels. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 2.17 times less risky than Sotherly Hotels. The index trades about -0.04 of its potential returns per unit of risk. The Sotherly Hotels Pref is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,710 in Sotherly Hotels Pref on December 3, 2024 and sell it today you would lose (5.00) from holding Sotherly Hotels Pref or give up 0.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.72% |
Values | Daily Returns |
NYSE Composite vs. Sotherly Hotels Pref
Performance |
Timeline |
NYSE Composite and Sotherly Hotels Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sotherly Hotels Pref
Pair trading matchups for Sotherly Hotels
Pair Trading with NYSE Composite and Sotherly Hotels
The main advantage of trading using opposite NYSE Composite and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Sotherly Hotels 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 Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.NYSE Composite vs. Inflection Point Acquisition | NYSE Composite vs. Cardinal Health | NYSE Composite vs. Futuretech II Acquisition | NYSE Composite vs. Black Spade Acquisition |
Sotherly Hotels vs. Sotherly Hotels | Sotherly Hotels vs. Service Properties Trust | Sotherly Hotels vs. Braemar Hotel Resorts | Sotherly Hotels vs. Summit Hotel Properties |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |