Correlation Between Sunstone Hotel and Jupiter Fund

Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel and Jupiter Fund 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 Sunstone Hotel and Jupiter Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunstone Hotel Investors and Jupiter Fund Management, you can compare the effects of market volatilities on Sunstone Hotel and Jupiter Fund 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 Sunstone Hotel with a short position of Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Jupiter Fund.

Diversification Opportunities for Sunstone Hotel and Jupiter Fund

0.19

Correlation Coefficient

Sunstone Hotel  Jupiter Fund

Average diversification

The 3 months correlation between Sunstone and Jupiter is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management and Sunstone 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 Sunstone Hotel Investors are associated (or correlated) with Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of Sunstone Hotel i.e., Sunstone Hotel and Jupiter Fund go up and down completely randomly.

Pair Corralation between Sunstone Hotel and Jupiter Fund

Assuming the 90 days horizon Sunstone Hotel Investors is expected to generate 0.58 times more return on investment than Jupiter Fund. However, Sunstone Hotel Investors is 1.71 times less risky than Jupiter Fund. It trades about 0.05 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.01 per unit of risk. If you would invest  877.00  in Sunstone Hotel Investors on October 4, 2024 and sell it today you would earn a total of  263.00  from holding Sunstone Hotel Investors or generate 29.99% return on investment over 90 days.

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

Sunstone Hotel Investors  vs.  Jupiter Fund Management

Sunstone Hotel Investors

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunstone Hotel Investors are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sunstone Hotel reported solid returns over the last few months and may actually be approaching a breakup point.

Jupiter Fund Management

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Fund Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Jupiter Fund is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sunstone Hotel and Jupiter Fund

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

The idea behind Sunstone Hotel Investors and Jupiter Fund Management 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 Stocks Directory module to find actively traded stocks across global markets.