Correlation Between Ashford Hospitality and Saratoga Investment
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Saratoga Investment 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 Saratoga Investment 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 Saratoga Investment Corp, you can compare the effects of market volatilities on Ashford Hospitality and Saratoga Investment 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 Saratoga Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Saratoga Investment.
Diversification Opportunities for Ashford Hospitality and Saratoga Investment
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashford and Saratoga is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp 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 Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Saratoga Investment go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Saratoga Investment
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 13.42 times more return on investment than Saratoga Investment. However, Ashford Hospitality is 13.42 times more volatile than Saratoga Investment Corp. It trades about 0.13 of its potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.39 per unit of risk. If you would invest 1,548 in Ashford Hospitality Trust on November 29, 2024 and sell it today you would earn a total of 77.00 from holding Ashford Hospitality Trust or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Saratoga Investment Corp
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Saratoga Investment Corp |
Ashford Hospitality and Saratoga Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Saratoga Investment
The main advantage of trading using opposite Ashford Hospitality and Saratoga Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Saratoga Investment 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 Saratoga Investment will offset losses from the drop in Saratoga Investment'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 |
| Saratoga Investment vs. The Gap, | Saratoga Investment vs. Hudson Technologies | Saratoga Investment vs. Triumph Apparel | Saratoga Investment vs. National Vision Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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