Correlation Between Sotherly Hotels and FOUR CORNERS

Can any of the company-specific risk be diversified away by investing in both Sotherly Hotels and FOUR CORNERS 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 Sotherly Hotels and FOUR CORNERS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sotherly Hotels and FOUR NERS PROPERTY, you can compare the effects of market volatilities on Sotherly Hotels and FOUR CORNERS 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 Sotherly Hotels with a short position of FOUR CORNERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotherly Hotels and FOUR CORNERS.

Diversification Opportunities for Sotherly Hotels and FOUR CORNERS

0.0

Correlation Coefficient

Sotherly Hotels  FOUR CORNERS

Pay attention - limited upside

The 3 months correlation between Sotherly and FOUR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sotherly Hotels and FOUR NERS PROPERTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOUR NERS PROPERTY and Sotherly Hotels 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 Sotherly Hotels are associated (or correlated) with FOUR CORNERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOUR NERS PROPERTY has no effect on the direction of Sotherly Hotels i.e., Sotherly Hotels and FOUR CORNERS go up and down completely randomly.

Pair Corralation between Sotherly Hotels and FOUR CORNERS

If you would invest  62.00  in Sotherly Hotels on April 24, 2025 and sell it today you would earn a total of  13.00  from holding Sotherly Hotels or generate 20.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sotherly Hotels  vs.  FOUR NERS PROPERTY

Sotherly Hotels

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sotherly Hotels are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sotherly Hotels reported solid returns over the last few months and may actually be approaching a breakup point.

FOUR NERS PROPERTY

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sotherly Hotels and FOUR CORNERS

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

The idea behind Sotherly Hotels and FOUR NERS PROPERTY 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.