Correlation Between Ashford Hospitality and Gladstone Land
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Gladstone Land 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 Gladstone Land 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 Gladstone Land Corp, you can compare the effects of market volatilities on Ashford Hospitality and Gladstone Land 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 Gladstone Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Gladstone Land.
Diversification Opportunities for Ashford Hospitality and Gladstone Land
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Gladstone is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Gladstone Land Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Land 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 Gladstone Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Land Corp has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Gladstone Land go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Gladstone Land
Assuming the 90 days trading horizon Ashford Hospitality is expected to generate 1.1 times less return on investment than Gladstone Land. In addition to that, Ashford Hospitality is 12.76 times more volatile than Gladstone Land Corp. It trades about 0.03 of its total potential returns per unit of risk. Gladstone Land Corp is currently generating about 0.37 per unit of volatility. If you would invest 2,443 in Gladstone Land Corp on August 25, 2024 and sell it today you would earn a total of 53.00 from holding Gladstone Land Corp or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Gladstone Land Corp
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Gladstone Land Corp |
Ashford Hospitality and Gladstone Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Gladstone Land
The main advantage of trading using opposite Ashford Hospitality and Gladstone Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Gladstone Land 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 Gladstone Land will offset losses from the drop in Gladstone Land'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 |
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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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