Correlation Between Ashford Hospitality and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Hannon Armstrong 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 Hannon Armstrong 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 Hannon Armstrong Sustainable, you can compare the effects of market volatilities on Ashford Hospitality and Hannon Armstrong 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 Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Hannon Armstrong.
Diversification Opportunities for Ashford Hospitality and Hannon Armstrong
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Hannon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Hannon Armstrong Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannon Armstrong Sus 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 Hannon Armstrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannon Armstrong Sus has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Hannon Armstrong go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Hannon Armstrong
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 2.6 times more return on investment than Hannon Armstrong. However, Ashford Hospitality is 2.6 times more volatile than Hannon Armstrong Sustainable. It trades about 0.28 of its potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about -0.18 per unit of risk. If you would invest 557.00 in Ashford Hospitality Trust on August 26, 2024 and sell it today you would earn a total of 369.00 from holding Ashford Hospitality Trust or generate 66.25% 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. Hannon Armstrong Sustainable
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Hannon Armstrong Sus |
Ashford Hospitality and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Hannon Armstrong
The main advantage of trading using opposite Ashford Hospitality and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Hannon Armstrong 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 Hannon Armstrong will offset losses from the drop in Hannon Armstrong's long position.| Ashford Hospitality vs. Ryman Hospitality Properties | Ashford Hospitality vs. Service Properties 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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