Correlation Between Ashford Hospitality and Ventas
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Ventas 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 Ventas 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 Ventas Inc, you can compare the effects of market volatilities on Ashford Hospitality and Ventas 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 Ventas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Ventas.
Diversification Opportunities for Ashford Hospitality and Ventas
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashford and Ventas is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc 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 Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Ventas go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Ventas
Assuming the 90 days trading horizon Ashford Hospitality is expected to generate 1.3 times less return on investment than Ventas. In addition to that, Ashford Hospitality is 2.17 times more volatile than Ventas Inc. It trades about 0.03 of its total potential returns per unit of risk. Ventas Inc is currently generating about 0.08 per unit of volatility. If you would invest 4,226 in Ventas Inc on August 27, 2024 and sell it today you would earn a total of 2,129 from holding Ventas Inc or generate 50.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Ventas Inc
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Ventas Inc |
Ashford Hospitality and Ventas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Ventas
The main advantage of trading using opposite Ashford Hospitality and Ventas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Ventas 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 Ventas will offset losses from the drop in Ventas' 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 |
| Ventas vs. Healthcare Realty Trust | Ventas vs. Healthpeak Properties | Ventas vs. Universal Health Realty | Ventas vs. Global Medical REIT |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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