Correlation Between Braemar Hotel and InnSuites Hospitality
Can any of the company-specific risk be diversified away by investing in both Braemar Hotel and InnSuites Hospitality 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 Hotel and InnSuites Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braemar Hotel Resorts and InnSuites Hospitality Trust, you can compare the effects of market volatilities on Braemar Hotel and InnSuites Hospitality 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 Hotel with a short position of InnSuites Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braemar Hotel and InnSuites Hospitality.
Diversification Opportunities for Braemar Hotel and InnSuites Hospitality
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Braemar and InnSuites is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Braemar Hotel Resorts and InnSuites Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnSuites Hospitality and Braemar Hotel 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 Hotel Resorts are associated (or correlated) with InnSuites Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnSuites Hospitality has no effect on the direction of Braemar Hotel i.e., Braemar Hotel and InnSuites Hospitality go up and down completely randomly.
Pair Corralation between Braemar Hotel and InnSuites Hospitality
Considering the 90-day investment horizon Braemar Hotel Resorts is expected to generate 1.54 times more return on investment than InnSuites Hospitality. However, Braemar Hotel is 1.54 times more volatile than InnSuites Hospitality Trust. It trades about 0.34 of its potential returns per unit of risk. InnSuites Hospitality Trust is currently generating about 0.35 per unit of risk. If you would invest 276.00 in Braemar Hotel Resorts on September 2, 2024 and sell it today you would earn a total of 84.00 from holding Braemar Hotel Resorts or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braemar Hotel Resorts vs. InnSuites Hospitality Trust
Performance |
| Timeline |
| Braemar Hotel Resorts |
| InnSuites Hospitality |
Braemar Hotel and InnSuites Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braemar Hotel and InnSuites Hospitality
The main advantage of trading using opposite Braemar Hotel and InnSuites Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braemar Hotel position performs unexpectedly, InnSuites Hospitality 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 InnSuites Hospitality will offset losses from the drop in InnSuites Hospitality's long position.| Braemar Hotel vs. Ryman Hospitality Properties | Braemar Hotel vs. Service Properties Trust | Braemar Hotel vs. RLJ Lodging Trust |
| InnSuites Hospitality vs. Regional Health Properties | InnSuites Hospitality vs. SemiLEDS | InnSuites Hospitality vs. SunLink Health Systems | InnSuites Hospitality vs. Avalon Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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