Correlation Between Ashford Hospitality and Global Net
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on Ashford Hospitality and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Global Net.
Diversification Opportunities for Ashford Hospitality and Global Net
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashford and Global is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Global Net go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Global Net
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to under-perform the Global Net. In addition to that, Ashford Hospitality is 2.86 times more volatile than Global Net Lease. It trades about -0.08 of its total potential returns per unit of risk. Global Net Lease is currently generating about -0.12 per unit of volatility. If you would invest 2,367 in Global Net Lease on August 27, 2024 and sell it today you would lose (65.00) from holding Global Net Lease or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Global Net Lease
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Global Net Lease |
Ashford Hospitality and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Global Net
The main advantage of trading using opposite Ashford Hospitality and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net'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 |
| Global Net vs. Modiv Inc | Global Net vs. Precinct Properties New | Global Net vs. Global Net Lease | Global Net vs. NexPoint Diversified Real |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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