Correlation Between Summit Hotel and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and DALATA HOTEL 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 DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on Summit Hotel and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and DALATA HOTEL.
Diversification Opportunities for Summit Hotel and DALATA HOTEL
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and DALATA is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of Summit Hotel i.e., Summit Hotel and DALATA HOTEL go up and down completely randomly.
Pair Corralation between Summit Hotel and DALATA HOTEL
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 1.53 times more return on investment than DALATA HOTEL. However, Summit Hotel is 1.53 times more volatile than DALATA HOTEL. It trades about 0.17 of its potential returns per unit of risk. DALATA HOTEL is currently generating about 0.22 per unit of risk. If you would invest 605.00 in Summit Hotel Properties on September 23, 2024 and sell it today you would earn a total of 45.00 from holding Summit Hotel Properties or generate 7.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Summit Hotel Properties vs. DALATA HOTEL
Performance |
Timeline |
Summit Hotel Properties |
DALATA HOTEL |
Summit Hotel and DALATA HOTEL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Summit Hotel and DALATA HOTEL
The main advantage of trading using opposite Summit Hotel and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.Summit Hotel vs. Cogent Communications Holdings | Summit Hotel vs. GREENX METALS LTD | Summit Hotel vs. Verizon Communications | Summit Hotel vs. Ribbon Communications |
DALATA HOTEL vs. Insteel Industries | DALATA HOTEL vs. BlueScope Steel Limited | DALATA HOTEL vs. SIEM OFFSHORE NEW | DALATA HOTEL vs. CSSC Offshore Marine |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Stocks Directory Find actively traded stocks across global markets | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |