Correlation Between Sotherly Hotels and LABOCANNA

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

By analyzing existing cross correlation between Sotherly Hotels and LABOCANNA SA ZY 10, you can compare the effects of market volatilities on Sotherly Hotels and LABOCANNA 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 LABOCANNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotherly Hotels and LABOCANNA.

Diversification Opportunities for Sotherly Hotels and LABOCANNA

-0.15

Correlation Coefficient

Sotherly Hotels  LABOCANNA

Good diversification

The 3 months correlation between Sotherly and LABOCANNA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sotherly Hotels and LABOCANNA SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LABOCANNA SA ZY 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 LABOCANNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LABOCANNA SA ZY has no effect on the direction of Sotherly Hotels i.e., Sotherly Hotels and LABOCANNA go up and down completely randomly.

Pair Corralation between Sotherly Hotels and LABOCANNA

Assuming the 90 days horizon Sotherly Hotels is expected to under-perform the LABOCANNA. In addition to that, Sotherly Hotels is 2.19 times more volatile than LABOCANNA SA ZY 10. It trades about -0.03 of its total potential returns per unit of risk. LABOCANNA SA ZY 10 is currently generating about -0.03 per unit of volatility. If you would invest  5.30  in LABOCANNA SA ZY 10 on July 2, 2025 and sell it today you would lose (0.24) from holding LABOCANNA SA ZY 10 or give up 4.53% of portfolio value over 90 days.

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

Sotherly Hotels  vs.  LABOCANNA SA ZY 10

Sotherly Hotels

Risk-Adjusted Performance

Weakest

Over the last 90 days Sotherly Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

LABOCANNA SA ZY

Risk-Adjusted Performance

Weakest

Over the last 90 days LABOCANNA SA ZY 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LABOCANNA 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 LABOCANNA

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

The idea behind Sotherly Hotels and LABOCANNA SA ZY 10 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.