Correlation Between Ashford Hospitality and Alpine Realty
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Alpine Realty 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 Alpine Realty 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 Alpine Realty Income, you can compare the effects of market volatilities on Ashford Hospitality and Alpine Realty 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 Alpine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Alpine Realty.
Diversification Opportunities for Ashford Hospitality and Alpine Realty
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashford and Alpine is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Alpine Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Realty Income 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 Alpine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Realty Income has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Alpine Realty go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Alpine Realty
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 3.32 times more return on investment than Alpine Realty. However, Ashford Hospitality is 3.32 times more volatile than Alpine Realty Income. It trades about 0.07 of its potential returns per unit of risk. Alpine Realty Income is currently generating about 0.2 per unit of risk. If you would invest 1,178 in Ashford Hospitality Trust on September 1, 2024 and sell it today you would earn a total of 243.00 from holding Ashford Hospitality Trust or generate 20.63% 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. Alpine Realty Income
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Alpine Realty Income |
Ashford Hospitality and Alpine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Alpine Realty
The main advantage of trading using opposite Ashford Hospitality and Alpine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Alpine Realty 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 Alpine Realty will offset losses from the drop in Alpine Realty's long position.| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Ashford Hospitality Trust |
| Alpine Realty vs. Third Avenue Real | Alpine Realty vs. Victory Global Natural | Alpine Realty vs. Real Estate Fund | Alpine Realty vs. Aegis Value Fund |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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