Correlation Between Ashford Hospitality and Orsted A/S
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Orsted A/S 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 Orsted A/S 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 Orsted AS, you can compare the effects of market volatilities on Ashford Hospitality and Orsted A/S 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 Orsted A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Orsted A/S.
Diversification Opportunities for Ashford Hospitality and Orsted A/S
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashford and Orsted is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted A/S 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 Orsted A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted A/S has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Orsted A/S go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Orsted A/S
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 2.06 times more return on investment than Orsted A/S. However, Ashford Hospitality is 2.06 times more volatile than Orsted AS. It trades about 0.24 of its potential returns per unit of risk. Orsted AS is currently generating about -0.12 per unit of risk. If you would invest 610.00 in Ashford Hospitality Trust on August 27, 2024 and sell it today you would earn a total of 309.00 from holding Ashford Hospitality Trust or generate 50.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Orsted AS
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Orsted A/S |
Ashford Hospitality and Orsted A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Orsted A/S
The main advantage of trading using opposite Ashford Hospitality and Orsted A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Orsted A/S 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 Orsted A/S will offset losses from the drop in Orsted A/S'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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