Correlation Between American Hotel and Aspen Digital
Can any of the company-specific risk be diversified away by investing in both American Hotel and Aspen Digital 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 American Hotel and Aspen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Aspen Digital, you can compare the effects of market volatilities on American Hotel and Aspen Digital 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 American Hotel with a short position of Aspen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Aspen Digital.
Diversification Opportunities for American Hotel and Aspen Digital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Aspen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Aspen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Digital and American 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 American Hotel Income are associated (or correlated) with Aspen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Digital has no effect on the direction of American Hotel i.e., American Hotel and Aspen Digital go up and down completely randomly.
Pair Corralation between American Hotel and Aspen Digital
Assuming the 90 days horizon American Hotel Income is expected to under-perform the Aspen Digital. In addition to that, American Hotel is 1.92 times more volatile than Aspen Digital. It trades about -0.03 of its total potential returns per unit of risk. Aspen Digital is currently generating about 0.02 per unit of volatility. If you would invest 330.00 in Aspen Digital on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Aspen Digital or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.12% |
| Values | Daily Returns |
American Hotel Income vs. Aspen Digital
Performance |
| Timeline |
| American Hotel Income |
| Aspen Digital |
American Hotel and Aspen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Aspen Digital
The main advantage of trading using opposite American Hotel and Aspen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Aspen Digital 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 Aspen Digital will offset losses from the drop in Aspen Digital's long position.| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Braemar Hotels Resorts | American Hotel vs. Braemar Hotels Resorts |
| Aspen Digital vs. tZERO Group | Aspen Digital vs. American Hotel Income | Aspen Digital vs. Allied Properties Real | Aspen Digital vs. American Films |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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