Correlation Between Ashford Hospitality and Granite Real
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Granite Real 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 Granite Real 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 Granite Real Estate, you can compare the effects of market volatilities on Ashford Hospitality and Granite Real 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 Granite Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Granite Real.
Diversification Opportunities for Ashford Hospitality and Granite Real
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashford and Granite is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Granite Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Real Estate 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 Granite Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Real Estate has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Granite Real go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Granite Real
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to under-perform the Granite Real. But the preferred stock apears to be less risky and, when comparing its historical volatility, Ashford Hospitality Trust is 1.36 times less risky than Granite Real. The preferred stock trades about -0.14 of its potential returns per unit of risk. The Granite Real Estate is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,492 in Granite Real Estate on August 31, 2024 and sell it today you would lose (165.00) from holding Granite Real Estate or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Granite Real Estate
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Granite Real Estate |
Ashford Hospitality and Granite Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Granite Real
The main advantage of trading using opposite Ashford Hospitality and Granite Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Granite Real 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 Granite Real will offset losses from the drop in Granite Real's long position.| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts |
| Granite Real vs. Public Storage | Granite Real vs. Public Storage | Granite Real vs. Public Storage | Granite Real vs. Public Storage |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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