Correlation Between Ashford Hospitality and Brookfield Property
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Brookfield Property 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 Brookfield Property 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 Brookfield Property Partners, you can compare the effects of market volatilities on Ashford Hospitality and Brookfield Property 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 Brookfield Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Brookfield Property.
Diversification Opportunities for Ashford Hospitality and Brookfield Property
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Brookfield is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Brookfield Property Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Property 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 Brookfield Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Property has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Brookfield Property go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Brookfield Property
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 1.35 times more return on investment than Brookfield Property. However, Ashford Hospitality is 1.35 times more volatile than Brookfield Property Partners. It trades about 0.02 of its potential returns per unit of risk. Brookfield Property Partners is currently generating about -0.05 per unit of risk. If you would invest 1,511 in Ashford Hospitality Trust on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Ashford Hospitality Trust or generate 0.66% 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. Brookfield Property Partners
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Brookfield Property |
Ashford Hospitality and Brookfield Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Brookfield Property
The main advantage of trading using opposite Ashford Hospitality and Brookfield Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Brookfield Property 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 Brookfield Property will offset losses from the drop in Brookfield Property's long position.| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts |
| Brookfield Property vs. Frp Holdings Ord | Brookfield Property vs. Transcontinental Realty Investors | Brookfield Property vs. Anywhere Real Estate | Brookfield Property vs. Re Max Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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