Correlation Between Braemar Hotels and Saul Centers
Can any of the company-specific risk be diversified away by investing in both Braemar Hotels and Saul Centers 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 Saul Centers 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 Saul Centers, you can compare the effects of market volatilities on Braemar Hotels and Saul Centers 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 Saul Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braemar Hotels and Saul Centers.
Diversification Opportunities for Braemar Hotels and Saul Centers
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Braemar and Saul is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Braemar Hotels Resorts and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers 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 Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of Braemar Hotels i.e., Braemar Hotels and Saul Centers go up and down completely randomly.
Pair Corralation between Braemar Hotels and Saul Centers
Assuming the 90 days trading horizon Braemar Hotels is expected to generate 1.2 times less return on investment than Saul Centers. In addition to that, Braemar Hotels is 2.02 times more volatile than Saul Centers. It trades about 0.02 of its total potential returns per unit of risk. Saul Centers is currently generating about 0.05 per unit of volatility. If you would invest 1,657 in Saul Centers on August 24, 2024 and sell it today you would earn a total of 593.00 from holding Saul Centers or generate 35.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Braemar Hotels Resorts vs. Saul Centers
Performance |
| Timeline |
| Braemar Hotels Resorts |
| Saul Centers |
Braemar Hotels and Saul Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braemar Hotels and Saul Centers
The main advantage of trading using opposite Braemar Hotels and Saul Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braemar Hotels position performs unexpectedly, Saul Centers 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 Saul Centers will offset losses from the drop in Saul Centers' 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 |
| Saul Centers vs. Saul Centers | Saul Centers vs. Braemar Hotels Resorts | Saul Centers vs. Armada Hoffler Properties |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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