Correlation Between Braemar Hotels and Cal Bay
Can any of the company-specific risk be diversified away by investing in both Braemar Hotels and Cal Bay 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 Cal Bay 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 Cal Bay Intl, you can compare the effects of market volatilities on Braemar Hotels and Cal Bay 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 Cal Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braemar Hotels and Cal Bay.
Diversification Opportunities for Braemar Hotels and Cal Bay
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Braemar and Cal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Braemar Hotels Resorts and Cal Bay Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Bay Intl 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 Cal Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Bay Intl has no effect on the direction of Braemar Hotels i.e., Braemar Hotels and Cal Bay go up and down completely randomly.
Pair Corralation between Braemar Hotels and Cal Bay
Assuming the 90 days trading horizon Braemar Hotels is expected to generate 56.98 times less return on investment than Cal Bay. But when comparing it to its historical volatility, Braemar Hotels Resorts is 35.92 times less risky than Cal Bay. It trades about 0.04 of its potential returns per unit of risk. Cal Bay Intl is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Cal Bay Intl on September 20, 2024 and sell it today you would earn a total of 0.00 from holding Cal Bay Intl or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braemar Hotels Resorts vs. Cal Bay Intl
Performance |
| Timeline |
| Braemar Hotels Resorts |
| Cal Bay Intl |
Braemar Hotels and Cal Bay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braemar Hotels and Cal Bay
The main advantage of trading using opposite Braemar Hotels and Cal Bay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braemar Hotels position performs unexpectedly, Cal Bay 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 Cal Bay will offset losses from the drop in Cal Bay's long position.| Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Braemar Hotels Resorts | Braemar Hotels vs. Ashford Hospitality Trust |
| Cal Bay vs. Ashford Hospitality Trust | Cal Bay vs. Ashford Hospitality Trust | Cal Bay vs. Braemar Hotels Resorts | Cal Bay vs. Braemar Hotels Resorts |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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