Correlation Between Ashford Hospitality and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising, you can compare the effects of market volatilities on Ashford Hospitality and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Lamar Advertising.
Diversification Opportunities for Ashford Hospitality and Lamar Advertising
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashford and Lamar is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Lamar Advertising go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Lamar Advertising
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to under-perform the Lamar Advertising. In addition to that, Ashford Hospitality is 3.32 times more volatile than Lamar Advertising. It trades about -0.05 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.07 per unit of volatility. If you would invest 9,345 in Lamar Advertising on August 28, 2024 and sell it today you would earn a total of 3,997 from holding Lamar Advertising or generate 42.77% 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. Lamar Advertising
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Lamar Advertising |
Ashford Hospitality and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Lamar Advertising
The main advantage of trading using opposite Ashford Hospitality and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising'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 |
| Lamar Advertising vs. Broadstone Net Lease | Lamar Advertising vs. Armada Hflr Pr | Lamar Advertising vs. Brightspire Capital | Lamar Advertising vs. Safehold |
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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