Correlation Between Ashford Hospitality and Electro Optic
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Electro Optic 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 Electro Optic 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 Electro Optic Systems, you can compare the effects of market volatilities on Ashford Hospitality and Electro Optic 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 Electro Optic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Electro Optic.
Diversification Opportunities for Ashford Hospitality and Electro Optic
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashford and Electro is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Electro Optic Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Optic Systems 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 Electro Optic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Optic Systems has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Electro Optic go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Electro Optic
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 1.46 times more return on investment than Electro Optic. However, Ashford Hospitality is 1.46 times more volatile than Electro Optic Systems. It trades about 0.03 of its potential returns per unit of risk. Electro Optic Systems is currently generating about -0.06 per unit of risk. If you would invest 898.00 in Ashford Hospitality Trust on September 2, 2024 and sell it today you would lose (3.00) from holding Ashford Hospitality Trust or give up 0.33% 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. Electro Optic Systems
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Electro Optic Systems |
Ashford Hospitality and Electro Optic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Electro Optic
The main advantage of trading using opposite Ashford Hospitality and Electro Optic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Electro Optic 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 Electro Optic will offset losses from the drop in Electro Optic'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 |
| Electro Optic vs. Firan Technology Group | Electro Optic vs. 808 Renewable Energy | Electro Optic vs. Park Electrochemical | Electro Optic vs. Innovative Solutions and |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |