Correlation Between BRAEMAR HOTELS and EMPEROR ENT
Can any of the company-specific risk be diversified away by investing in both BRAEMAR HOTELS and EMPEROR ENT 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 BRAEMAR HOTELS and EMPEROR ENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRAEMAR HOTELS RES and EMPEROR ENT HOTEL, you can compare the effects of market volatilities on BRAEMAR HOTELS and EMPEROR ENT 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 BRAEMAR HOTELS with a short position of EMPEROR ENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRAEMAR HOTELS and EMPEROR ENT.
Diversification Opportunities for BRAEMAR HOTELS and EMPEROR ENT
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BRAEMAR and EMPEROR is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BRAEMAR HOTELS RES and EMPEROR ENT HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMPEROR ENT HOTEL and BRAEMAR 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 BRAEMAR HOTELS RES are associated (or correlated) with EMPEROR ENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMPEROR ENT HOTEL has no effect on the direction of BRAEMAR HOTELS i.e., BRAEMAR HOTELS and EMPEROR ENT go up and down completely randomly.
Pair Corralation between BRAEMAR HOTELS and EMPEROR ENT
Assuming the 90 days horizon BRAEMAR HOTELS is expected to generate 1.9 times less return on investment than EMPEROR ENT. But when comparing it to its historical volatility, BRAEMAR HOTELS RES is 1.62 times less risky than EMPEROR ENT. It trades about 0.05 of its potential returns per unit of risk. EMPEROR ENT HOTEL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.40 in EMPEROR ENT HOTEL on October 12, 2024 and sell it today you would earn a total of 1.10 from holding EMPEROR ENT HOTEL or generate 45.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRAEMAR HOTELS RES vs. EMPEROR ENT HOTEL
Performance |
| Timeline |
| BRAEMAR HOTELS RES |
| EMPEROR ENT HOTEL |
BRAEMAR HOTELS and EMPEROR ENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRAEMAR HOTELS and EMPEROR ENT
The main advantage of trading using opposite BRAEMAR HOTELS and EMPEROR ENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRAEMAR HOTELS position performs unexpectedly, EMPEROR ENT 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 EMPEROR ENT will offset losses from the drop in EMPEROR ENT's long position.| BRAEMAR HOTELS vs. Hua Hong Semiconductor | BRAEMAR HOTELS vs. DEVRY EDUCATION GRP | BRAEMAR HOTELS vs. TAL Education Group | BRAEMAR HOTELS vs. TOREX SEMICONDUCTOR LTD |
| EMPEROR ENT vs. PURETECH HEALTH PLC | EMPEROR ENT vs. Planet Fitness | EMPEROR ENT vs. Acadia Healthcare | EMPEROR ENT vs. AXWAY SOFTWARE EO |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |