Correlation Between Braemar Hotels and Braemar Hotels
Can any of the company-specific risk be diversified away by investing in both Braemar Hotels 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 Braemar Hotels and Braemar Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braemar Hotels Resorts and Braemar Hotels Resorts, you can compare the effects of market volatilities on Braemar Hotels 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 Braemar Hotels with a short position of Braemar Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braemar Hotels and Braemar Hotels.
Diversification Opportunities for Braemar Hotels and Braemar Hotels
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Braemar and Braemar is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Braemar Hotels Resorts 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 Braemar Hotels 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 Braemar Hotels Resorts 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 Braemar Hotels i.e., Braemar Hotels and Braemar Hotels go up and down completely randomly.
Pair Corralation between Braemar Hotels and Braemar Hotels
Assuming the 90 days trading horizon Braemar Hotels Resorts is expected to generate 1.48 times more return on investment than Braemar Hotels. However, Braemar Hotels is 1.48 times more volatile than Braemar Hotels Resorts. It trades about 0.01 of its potential returns per unit of risk. Braemar Hotels Resorts is currently generating about -0.18 per unit of risk. If you would invest 1,479 in Braemar Hotels Resorts on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Braemar Hotels Resorts or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braemar Hotels Resorts vs. Braemar Hotels Resorts
Performance |
| Timeline |
| Braemar Hotels Resorts |
| Braemar Hotels Resorts |
Braemar Hotels and Braemar Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braemar Hotels and Braemar Hotels
The main advantage of trading using opposite Braemar Hotels and Braemar Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braemar Hotels 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.| Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust |
| Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Braemar Hotels Resorts | Braemar Hotels vs. Ashford Hospitality Trust |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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