Correlation Between Altisource Asset and Braemar Hotel
Can any of the company-specific risk be diversified away by investing in both Altisource Asset and Braemar 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 Altisource Asset and Braemar Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altisource Asset Management and Braemar Hotel Resorts, you can compare the effects of market volatilities on Altisource Asset and Braemar 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 Altisource Asset with a short position of Braemar Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altisource Asset and Braemar Hotel.
Diversification Opportunities for Altisource Asset and Braemar Hotel
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altisource and Braemar is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Altisource Asset Management and Braemar Hotel Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braemar Hotel Resorts and Altisource Asset 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 Altisource Asset Management are associated (or correlated) with Braemar Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braemar Hotel Resorts has no effect on the direction of Altisource Asset i.e., Altisource Asset and Braemar Hotel go up and down completely randomly.
Pair Corralation between Altisource Asset and Braemar Hotel
Given the investment horizon of 90 days Altisource Asset Management is expected to under-perform the Braemar Hotel. In addition to that, Altisource Asset is 2.46 times more volatile than Braemar Hotel Resorts. It trades about -0.04 of its total potential returns per unit of risk. Braemar Hotel Resorts is currently generating about 0.08 per unit of volatility. If you would invest 209.00 in Braemar Hotel Resorts on September 2, 2024 and sell it today you would earn a total of 151.00 from holding Braemar Hotel Resorts or generate 72.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 79.03% |
| Values | Daily Returns |
Altisource Asset Management vs. Braemar Hotel Resorts
Performance |
| Timeline |
| Altisource Asset Man |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Braemar Hotel Resorts |
Altisource Asset and Braemar Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altisource Asset and Braemar Hotel
The main advantage of trading using opposite Altisource Asset and Braemar Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altisource Asset position performs unexpectedly, Braemar 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 Braemar Hotel will offset losses from the drop in Braemar Hotel's long position.| Altisource Asset vs. Abrdn Emerging Markets | Altisource Asset vs. DWS Municipal Income | Altisource Asset vs. Blackrock Muni Intermediate | Altisource Asset vs. Blackrock Muniyield |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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