Correlation Between Ashford Hospitality and Powerstorm Holdings
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Powerstorm Holdings 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 Powerstorm Holdings 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 Powerstorm Holdings, you can compare the effects of market volatilities on Ashford Hospitality and Powerstorm Holdings 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 Powerstorm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Powerstorm Holdings.
Diversification Opportunities for Ashford Hospitality and Powerstorm Holdings
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashford and Powerstorm is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Powerstorm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerstorm Holdings 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 Powerstorm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerstorm Holdings has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Powerstorm Holdings go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Powerstorm Holdings
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to under-perform the Powerstorm Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Ashford Hospitality Trust is 2.44 times less risky than Powerstorm Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Powerstorm Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Powerstorm Holdings on September 4, 2024 and sell it today you would lose (11.70) from holding Powerstorm Holdings or give up 90.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Powerstorm Holdings
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Powerstorm Holdings |
Ashford Hospitality and Powerstorm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Powerstorm Holdings
The main advantage of trading using opposite Ashford Hospitality and Powerstorm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Powerstorm Holdings 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 Powerstorm Holdings will offset losses from the drop in Powerstorm Holdings' long position.| Ashford Hospitality vs. Diamondrock Hospitality | Ashford Hospitality vs. Ryman Hospitality Properties | Ashford Hospitality vs. Sunstone Hotel Investors | Ashford Hospitality vs. Service Properties Trust |
| Powerstorm Holdings vs. Legrand SA ADR | Powerstorm Holdings vs. Loop Energy | Powerstorm Holdings vs. Sunrise New Energy | Powerstorm Holdings vs. Alfen NV |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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