Correlation Between Summit Hotel and TIMBERCREEK FINL

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

Diversification Opportunities for Summit Hotel and TIMBERCREEK FINL

0.71

Correlation Coefficient

Summit Hotel  TIMBERCREEK FINL

Poor diversification

The 3 months correlation between Summit and TIMBERCREEK is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and TIMBERCREEK FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMBERCREEK FINL 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 TIMBERCREEK FINL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMBERCREEK FINL has no effect on the direction of Summit Hotel i.e., Summit Hotel and TIMBERCREEK FINL go up and down completely randomly.

Pair Corralation between Summit Hotel and TIMBERCREEK FINL

Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the TIMBERCREEK FINL. In addition to that, Summit Hotel is 1.07 times more volatile than TIMBERCREEK FINL. It trades about -0.18 of its total potential returns per unit of risk. TIMBERCREEK FINL is currently generating about -0.05 per unit of volatility. If you would invest  455.00  in TIMBERCREEK FINL on December 24, 2024 and sell it today you would lose (31.00) from holding TIMBERCREEK FINL or give up 6.81% of portfolio value over 90 days.

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

Summit Hotel Properties  vs.  TIMBERCREEK FINL

Summit Hotel Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Summit Hotel Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

TIMBERCREEK FINL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TIMBERCREEK FINL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TIMBERCREEK FINL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Summit Hotel and TIMBERCREEK FINL

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

The idea behind Summit Hotel Properties and TIMBERCREEK FINL 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 CEOs Directory module to screen CEOs from public companies around the world.