Correlation Between Ashford Hospitality and Weir Group
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Weir Group 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 Weir Group 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 The Weir Group, you can compare the effects of market volatilities on Ashford Hospitality and Weir Group 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 Weir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Weir Group.
Diversification Opportunities for Ashford Hospitality and Weir Group
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Weir is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and The Weir Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weir Group 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 Weir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weir Group has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Weir Group go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Weir Group
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to under-perform the Weir Group. In addition to that, Ashford Hospitality is 2.66 times more volatile than The Weir Group. It trades about -0.05 of its total potential returns per unit of risk. The Weir Group is currently generating about 0.04 per unit of volatility. If you would invest 2,162 in The Weir Group on September 4, 2024 and sell it today you would earn a total of 543.00 from holding The Weir Group or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.52% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. The Weir Group
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Weir Group |
Ashford Hospitality and Weir Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Weir Group
The main advantage of trading using opposite Ashford Hospitality and Weir Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Weir Group 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 Weir Group will offset losses from the drop in Weir Group's 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 |
| Weir Group vs. Shanghai Electric Group | Weir Group vs. Xinjiang Goldwind Science | Weir Group vs. American Superconductor | Weir Group vs. Cummins |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |