Correlation Between Ashford Hospitality and Terreno Realty
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Terreno 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 Terreno 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 Terreno Realty, you can compare the effects of market volatilities on Ashford Hospitality and Terreno 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 Terreno Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Terreno Realty.
Diversification Opportunities for Ashford Hospitality and Terreno Realty
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashford and Terreno is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Terreno Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Realty 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 Terreno Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Realty has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Terreno Realty go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Terreno Realty
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to under-perform the Terreno Realty. In addition to that, Ashford Hospitality is 2.41 times more volatile than Terreno Realty. It trades about -0.13 of its total potential returns per unit of risk. Terreno Realty is currently generating about 0.01 per unit of volatility. If you would invest 6,117 in Terreno Realty on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Terreno Realty or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Terreno Realty
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Terreno Realty |
Ashford Hospitality and Terreno Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Terreno Realty
The main advantage of trading using opposite Ashford Hospitality and Terreno Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Terreno 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 Terreno Realty will offset losses from the drop in Terreno 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. Aspen Digital |
| Terreno Realty vs. Boston Properties | Terreno Realty vs. Douglas Emmett | Terreno Realty vs. Kilroy Realty Corp | Terreno Realty vs. Highwoods Properties |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |