Correlation Between Ashford Hospitality and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Wilmar International 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 Wilmar International 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 Wilmar International Limited, you can compare the effects of market volatilities on Ashford Hospitality and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Wilmar International.
Diversification Opportunities for Ashford Hospitality and Wilmar International
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashford and Wilmar is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Wilmar International go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Wilmar International
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to under-perform the Wilmar International. In addition to that, Ashford Hospitality is 1.15 times more volatile than Wilmar International Limited. It trades about -0.03 of its total potential returns per unit of risk. Wilmar International Limited is currently generating about 0.03 per unit of volatility. If you would invest 218.00 in Wilmar International Limited on November 5, 2024 and sell it today you would earn a total of 8.00 from holding Wilmar International Limited or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.71% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Wilmar International Limited
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Wilmar International |
Ashford Hospitality and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Wilmar International
The main advantage of trading using opposite Ashford Hospitality and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International'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 |
| Wilmar International vs. Fresh Del Monte | Wilmar International vs. Limoneira Co | Wilmar International vs. Brasilagro Adr | Wilmar International vs. Alico Inc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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