Correlation Between Ashford Hospitality and TCL Electronics
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and TCL Electronics 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 TCL Electronics 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 TCL Electronics Holdings, you can compare the effects of market volatilities on Ashford Hospitality and TCL Electronics 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 TCL Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and TCL Electronics.
Diversification Opportunities for Ashford Hospitality and TCL Electronics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and TCL is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and TCL Electronics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCL Electronics 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 TCL Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCL Electronics Holdings has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and TCL Electronics go up and down completely randomly.
Pair Corralation between Ashford Hospitality and TCL Electronics
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to under-perform the TCL Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Ashford Hospitality Trust is 1.12 times less risky than TCL Electronics. The stock trades about -0.06 of its potential returns per unit of risk. The TCL Electronics Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 42.00 in TCL Electronics Holdings on August 27, 2024 and sell it today you would earn a total of 20.00 from holding TCL Electronics Holdings or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.82% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. TCL Electronics Holdings
Performance |
| Timeline |
| Ashford Hospitality Trust |
| TCL Electronics Holdings |
Ashford Hospitality and TCL Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and TCL Electronics
The main advantage of trading using opposite Ashford Hospitality and TCL Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, TCL Electronics 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 TCL Electronics will offset losses from the drop in TCL Electronics' long position.| Ashford Hospitality vs. Sotherly Hotels | Ashford Hospitality vs. Summit Hotel Properties | Ashford Hospitality vs. Diamondrock Hospitality | Ashford Hospitality vs. RLJ Lodging Trust |
| TCL Electronics vs. Apple Inc | TCL Electronics vs. Xiaomi Corp | TCL Electronics vs. Samsung Electronics Co | TCL Electronics vs. LG Display Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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