Correlation Between Ashford Hospitality and New York
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and New York 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 New York 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 New York Mortgage, you can compare the effects of market volatilities on Ashford Hospitality and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and New York.
Diversification Opportunities for Ashford Hospitality and New York
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ashford and New is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and New York go up and down completely randomly.
Pair Corralation between Ashford Hospitality and New York
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to under-perform the New York. In addition to that, Ashford Hospitality is 6.58 times more volatile than New York Mortgage. It trades about -0.21 of its total potential returns per unit of risk. New York Mortgage is currently generating about 0.07 per unit of volatility. If you would invest 2,520 in New York Mortgage on September 2, 2024 and sell it today you would earn a total of 13.00 from holding New York Mortgage or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. New York Mortgage
Performance |
| Timeline |
| Ashford Hospitality Trust |
| New York Mortgage |
Ashford Hospitality and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and New York
The main advantage of trading using opposite Ashford Hospitality and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Aspen Digital |
| New York vs. Nexpoint Residential Trust | New York vs. Veris Residential | New York vs. Clipper Realty | New York vs. UDR Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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