Correlation Between Ashford Hospitality and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Brandywine 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 Brandywine 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 Brandywine Realty Trust, you can compare the effects of market volatilities on Ashford Hospitality and Brandywine 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 Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Brandywine Realty.
Diversification Opportunities for Ashford Hospitality and Brandywine Realty
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Brandywine is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Brandywine Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywine Realty Trust 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 Brandywine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywine Realty Trust has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Brandywine Realty go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Brandywine Realty
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 1.52 times more return on investment than Brandywine Realty. However, Ashford Hospitality is 1.52 times more volatile than Brandywine Realty Trust. It trades about 0.04 of its potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.06 per unit of risk. If you would invest 1,434 in Ashford Hospitality Trust on August 24, 2024 and sell it today you would earn a total of 29.00 from holding Ashford Hospitality Trust or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Brandywine Realty Trust
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Brandywine Realty Trust |
Ashford Hospitality and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Brandywine Realty
The main advantage of trading using opposite Ashford Hospitality and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Brandywine 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 Brandywine Realty will offset losses from the drop in Brandywine 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 |
| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Piedmont Office Realty | Brandywine Realty vs. City Office | Brandywine Realty vs. Cousins Properties Incorporated |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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