Correlation Between Ashford Hospitality and Wartsila Oyj
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Wartsila Oyj 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 Wartsila Oyj 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 Wartsila Oyj Abp, you can compare the effects of market volatilities on Ashford Hospitality and Wartsila Oyj 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 Wartsila Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Wartsila Oyj.
Diversification Opportunities for Ashford Hospitality and Wartsila Oyj
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashford and Wartsila is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Wartsila Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wartsila Oyj Abp 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 Wartsila Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wartsila Oyj Abp has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Wartsila Oyj go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Wartsila Oyj
Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 1.78 times more return on investment than Wartsila Oyj. However, Ashford Hospitality is 1.78 times more volatile than Wartsila Oyj Abp. It trades about 0.01 of its potential returns per unit of risk. Wartsila Oyj Abp is currently generating about -0.17 per unit of risk. If you would invest 903.00 in Ashford Hospitality Trust on September 12, 2024 and sell it today you would lose (22.00) from holding Ashford Hospitality Trust or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Wartsila Oyj Abp
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Wartsila Oyj Abp |
Ashford Hospitality and Wartsila Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Wartsila Oyj
The main advantage of trading using opposite Ashford Hospitality and Wartsila Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Wartsila Oyj 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 Wartsila Oyj will offset losses from the drop in Wartsila Oyj'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 |
| Wartsila Oyj vs. Sandvik AB ADR | Wartsila Oyj vs. Rockwell Automation | Wartsila Oyj vs. Park Ohio Holdings | Wartsila Oyj vs. Gates Industrial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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