Correlation Between Ashford Hospitality and Alibaba Health
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Alibaba Health 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 Alibaba Health 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 Alibaba Health Information, you can compare the effects of market volatilities on Ashford Hospitality and Alibaba Health 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 Alibaba Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Alibaba Health.
Diversification Opportunities for Ashford Hospitality and Alibaba Health
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Alibaba is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor 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 Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Alibaba Health go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Alibaba Health
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to under-perform the Alibaba Health. In addition to that, Ashford Hospitality is 1.33 times more volatile than Alibaba Health Information. It trades about -0.05 of its total potential returns per unit of risk. Alibaba Health Information is currently generating about -0.02 per unit of volatility. If you would invest 1,843 in Alibaba Health Information on August 27, 2024 and sell it today you would lose (938.00) from holding Alibaba Health Information or give up 50.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Alibaba Health Information
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Alibaba Health Infor |
Ashford Hospitality and Alibaba Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Alibaba Health
The main advantage of trading using opposite Ashford Hospitality and Alibaba Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Alibaba Health 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 Alibaba Health will offset losses from the drop in Alibaba Health's long position.| Ashford Hospitality vs. Sotherly Hotels | Ashford Hospitality vs. Summit Hotel Properties | Ashford Hospitality vs. Diamondrock Hospitality | Ashford Hospitality vs. RLJ Lodging Trust |
| Alibaba Health vs. Leafly Holdings | Alibaba Health vs. Leafly Holdings | Alibaba Health vs. SunLink Health Systems | Alibaba Health vs. Aquagold International |
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 CEOs Directory module to screen CEOs from public companies around the world.
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