Correlation Between Ashford Hospitality and Home Capital
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Home Capital 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 Home Capital 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 Home Capital Group, you can compare the effects of market volatilities on Ashford Hospitality and Home Capital 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 Home Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Home Capital.
Diversification Opportunities for Ashford Hospitality and Home Capital
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashford and Home is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Home Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Capital Group 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 Home Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Capital Group has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Home Capital go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Home Capital
If you would invest 604.00 in Ashford Hospitality Trust on August 30, 2024 and sell it today you would earn a total of 272.00 from holding Ashford Hospitality Trust or generate 45.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Home Capital Group
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Home Capital Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ashford Hospitality and Home Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Home Capital
The main advantage of trading using opposite Ashford Hospitality and Home Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Home Capital 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 Home Capital will offset losses from the drop in Home Capital'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 |
| Home Capital vs. Guild Holdings Co | Home Capital vs. Rocket Companies | Home Capital vs. UWM Holdings Corp | Home Capital vs. Mr Cooper Group |
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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