Correlation Between Saul Centers and Braemar Hotels
Can any of the company-specific risk be diversified away by investing in both Saul Centers and Braemar Hotels 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 Saul Centers and Braemar Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saul Centers and Braemar Hotels Resorts, you can compare the effects of market volatilities on Saul Centers and Braemar Hotels 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 Saul Centers with a short position of Braemar Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saul Centers and Braemar Hotels.
Diversification Opportunities for Saul Centers and Braemar Hotels
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saul and Braemar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and Braemar Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braemar Hotels Resorts and Saul Centers 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 Saul Centers are associated (or correlated) with Braemar Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braemar Hotels Resorts has no effect on the direction of Saul Centers i.e., Saul Centers and Braemar Hotels go up and down completely randomly.
Pair Corralation between Saul Centers and Braemar Hotels
Assuming the 90 days trading horizon Saul Centers is expected to under-perform the Braemar Hotels. In addition to that, Saul Centers is 1.37 times more volatile than Braemar Hotels Resorts. It trades about -0.04 of its total potential returns per unit of risk. Braemar Hotels Resorts is currently generating about -0.05 per unit of volatility. If you would invest 2,085 in Braemar Hotels Resorts on September 12, 2024 and sell it today you would lose (23.00) from holding Braemar Hotels Resorts or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saul Centers vs. Braemar Hotels Resorts
Performance |
| Timeline |
| Saul Centers |
| Braemar Hotels Resorts |
Saul Centers and Braemar Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saul Centers and Braemar Hotels
The main advantage of trading using opposite Saul Centers and Braemar Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saul Centers position performs unexpectedly, Braemar Hotels 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 Braemar Hotels will offset losses from the drop in Braemar Hotels' long position.| Saul Centers vs. Saul Centers | Saul Centers vs. Saul Centers | Saul Centers vs. Regency Centers | Saul Centers vs. Urban Edge Properties |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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