Correlation Between Ashford Hospitality and Safe
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Safe 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 Safe 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 Safe and Green, you can compare the effects of market volatilities on Ashford Hospitality and Safe 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 Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Safe.
Diversification Opportunities for Ashford Hospitality and Safe
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashford and Safe is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Safe and Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe and Green 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 Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe and Green has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Safe go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Safe
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 0.3 times more return on investment than Safe. However, Ashford Hospitality Trust is 3.34 times less risky than Safe. It trades about 0.02 of its potential returns per unit of risk. Safe and Green is currently generating about -0.27 per unit of risk. If you would invest 1,511 in Ashford Hospitality Trust on August 27, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Safe and Green
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Safe and Green |
Ashford Hospitality and Safe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Safe
The main advantage of trading using opposite Ashford Hospitality and Safe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Safe 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 Safe will offset losses from the drop in Safe's long position.| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Aspen Digital |
| Safe vs. Investcorp Credit Management | Safe vs. Medalist Diversified Reit | Safe vs. Aquagold International | Safe vs. Morningstar Unconstrained Allocation |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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