Correlation Between Ashford Hospitality and Empire State
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Empire State 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 Empire State 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 Empire State Realty, you can compare the effects of market volatilities on Ashford Hospitality and Empire State 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 Empire State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Empire State.
Diversification Opportunities for Ashford Hospitality and Empire State
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashford and Empire is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Empire State Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire State Realty 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 Empire State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire State Realty has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Empire State go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Empire State
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 5.6 times more return on investment than Empire State. However, Ashford Hospitality is 5.6 times more volatile than Empire State Realty. It trades about 0.24 of its potential returns per unit of risk. Empire State Realty is currently generating about 0.02 per unit of risk. If you would invest 610.00 in Ashford Hospitality Trust on August 28, 2024 and sell it today you would earn a total of 309.00 from holding Ashford Hospitality Trust or generate 50.66% 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. Empire State Realty
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Empire State Realty |
Ashford Hospitality and Empire State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Empire State
The main advantage of trading using opposite Ashford Hospitality and Empire State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Empire State 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 Empire State will offset losses from the drop in Empire State'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 |
| Empire State vs. Empire State Realty | Empire State vs. City Office | Empire State vs. Cousins Properties Incorporated | Empire State vs. Postal Realty Trust |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |