Correlation Between Ashford Hospitality and Bear Creek
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Bear Creek 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 Bear Creek 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 Bear Creek Mining, you can compare the effects of market volatilities on Ashford Hospitality and Bear Creek 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 Bear Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Bear Creek.
Diversification Opportunities for Ashford Hospitality and Bear Creek
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashford and Bear is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Bear Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Creek Mining 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 Bear Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Creek Mining has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Bear Creek go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Bear Creek
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 1.15 times more return on investment than Bear Creek. However, Ashford Hospitality is 1.15 times more volatile than Bear Creek Mining. It trades about 0.15 of its potential returns per unit of risk. Bear Creek Mining is currently generating about -0.1 per unit of risk. If you would invest 723.00 in Ashford Hospitality Trust on September 1, 2024 and sell it today you would earn a total of 172.00 from holding Ashford Hospitality Trust or generate 23.79% 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. Bear Creek Mining
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Bear Creek Mining |
Ashford Hospitality and Bear Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Bear Creek
The main advantage of trading using opposite Ashford Hospitality and Bear Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Bear Creek 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 Bear Creek will offset losses from the drop in Bear Creek'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 |
| Bear Creek vs. South32 Limited | Bear Creek vs. NioCorp Developments Ltd | Bear Creek vs. HUMANA INC | Bear Creek vs. SCOR PK |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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