Correlation Between Ashford Hospitality and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Acadia Realty 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 Ashford Hospitality and Acadia Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashford Hospitality Trust and Acadia Realty Trust, you can compare the effects of market volatilities on Ashford Hospitality and Acadia Realty 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 Ashford Hospitality with a short position of Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Acadia Realty.
Diversification Opportunities for Ashford Hospitality and Acadia Realty
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Acadia is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust and Ashford Hospitality 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 Ashford Hospitality Trust are associated (or correlated) with Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Acadia Realty go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Acadia Realty
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to under-perform the Acadia Realty. In addition to that, Ashford Hospitality is 2.28 times more volatile than Acadia Realty Trust. It trades about -0.15 of its total potential returns per unit of risk. Acadia Realty Trust is currently generating about 0.33 per unit of volatility. If you would invest 2,435 in Acadia Realty Trust on August 30, 2024 and sell it today you would earn a total of 173.00 from holding Acadia Realty Trust or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Acadia Realty Trust
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Acadia Realty Trust |
Ashford Hospitality and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Acadia Realty
The main advantage of trading using opposite Ashford Hospitality and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Aspen Digital |
| Acadia Realty vs. Urban Edge Properties | Acadia Realty vs. Kite Realty Group | Acadia Realty vs. Site Centers Corp | Acadia Realty vs. Retail Opportunity Investments |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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