Correlation Between FitLife Brands, and Summit Hotel

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

By analyzing existing cross correlation between FitLife Brands, Common and Summit Hotel Properties, you can compare the effects of market volatilities on FitLife Brands, and Summit 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 FitLife Brands, with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Summit Hotel.

Diversification Opportunities for FitLife Brands, and Summit Hotel

0.47

Correlation Coefficient

FitLife Brands,  Summit Hotel

Very weak diversification

The 3 months correlation between FitLife and Summit is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties and FitLife Brands, 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 FitLife Brands, Common are associated (or correlated) with Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Summit Hotel go up and down completely randomly.

Pair Corralation between FitLife Brands, and Summit Hotel

Given the investment horizon of 90 days FitLife Brands, is expected to generate 7.73 times less return on investment than Summit Hotel. In addition to that, FitLife Brands, is 1.13 times more volatile than Summit Hotel Properties. It trades about 0.0 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.03 per unit of volatility. If you would invest  675.00  in Summit Hotel Properties on September 25, 2024 and sell it today you would earn a total of  14.00  from holding Summit Hotel Properties or generate 2.07% return on investment over 90 days.

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

FitLife Brands, Common  vs.  Summit Hotel Properties

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

Very Weak

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

Summit Hotel Properties

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Hotel Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Summit Hotel is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FitLife Brands, and Summit Hotel

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

The idea behind FitLife Brands, Common and Summit Hotel Properties 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.