Correlation Between Summit Hotel and CLOVER HEALTH
Can any of the company-specific risk be diversified away by investing in both Summit Hotel and CLOVER HEALTH 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 CLOVER HEALTH 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 CLOVER HEALTH INV, you can compare the effects of market volatilities on Summit Hotel and CLOVER HEALTH 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 CLOVER HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and CLOVER HEALTH.
Diversification Opportunities for Summit Hotel and CLOVER HEALTH
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and CLOVER is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and CLOVER HEALTH INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLOVER HEALTH INV 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 CLOVER HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLOVER HEALTH INV has no effect on the direction of Summit Hotel i.e., Summit Hotel and CLOVER HEALTH go up and down completely randomly.
Pair Corralation between Summit Hotel and CLOVER HEALTH
Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.79 times more return on investment than CLOVER HEALTH. However, Summit Hotel Properties is 1.27 times less risky than CLOVER HEALTH. It trades about 0.19 of its potential returns per unit of risk. CLOVER HEALTH INV is currently generating about -0.02 per unit of risk. If you would invest 326.00 in Summit Hotel Properties on April 21, 2025 and sell it today you would earn a total of 124.00 from holding Summit Hotel Properties or generate 38.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Summit Hotel Properties vs. CLOVER HEALTH INV
Performance |
Timeline |
Summit Hotel Properties |
CLOVER HEALTH INV |
Summit Hotel and CLOVER HEALTH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Summit Hotel and CLOVER HEALTH
The main advantage of trading using opposite Summit Hotel and CLOVER HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel position performs unexpectedly, CLOVER HEALTH 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 CLOVER HEALTH will offset losses from the drop in CLOVER HEALTH's long position.Summit Hotel vs. Zoom Video Communications | Summit Hotel vs. COLUMBIA SPORTSWEAR | Summit Hotel vs. LG Display Co | Summit Hotel vs. SmarTone Telecommunications Holdings |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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