Correlation Between Ashford Hospitality and Lyons Bancorp
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Lyons Bancorp 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 Lyons Bancorp 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 Lyons Bancorp, you can compare the effects of market volatilities on Ashford Hospitality and Lyons Bancorp 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 Lyons Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Lyons Bancorp.
Diversification Opportunities for Ashford Hospitality and Lyons Bancorp
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashford and Lyons is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Lyons Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyons Bancorp 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 Lyons Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyons Bancorp has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Lyons Bancorp go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Lyons Bancorp
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 8.78 times more return on investment than Lyons Bancorp. However, Ashford Hospitality is 8.78 times more volatile than Lyons Bancorp. It trades about 0.28 of its potential returns per unit of risk. Lyons Bancorp is currently generating about -0.03 per unit of risk. If you would invest 550.00 in Ashford Hospitality Trust on August 25, 2024 and sell it today you would earn a total of 376.00 from holding Ashford Hospitality Trust or generate 68.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Lyons Bancorp
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Lyons Bancorp |
Ashford Hospitality and Lyons Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Lyons Bancorp
The main advantage of trading using opposite Ashford Hospitality and Lyons Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Lyons Bancorp 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 Lyons Bancorp will offset losses from the drop in Lyons Bancorp's long position.| Ashford Hospitality vs. Diamondrock Hospitality | Ashford Hospitality vs. Ryman Hospitality Properties | Ashford Hospitality vs. Pebblebrook Hotel Trust | Ashford Hospitality vs. Host Hotels Resorts |
| Lyons Bancorp vs. FS Bancorp | Lyons Bancorp vs. Eastern Michigan Financial | Lyons Bancorp vs. Grand River Commerce | Lyons Bancorp vs. Bank of Botetourt |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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