Correlation Between China Changjiang and Ashford Hospitality
Can any of the company-specific risk be diversified away by investing in both China Changjiang and Ashford 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 China Changjiang and Ashford Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Changjiang Mining and Ashford Hospitality Trust, you can compare the effects of market volatilities on China Changjiang and Ashford 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 China Changjiang with a short position of Ashford Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Changjiang and Ashford Hospitality.
Diversification Opportunities for China Changjiang and Ashford Hospitality
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Ashford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Changjiang Mining and Ashford Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashford Hospitality Trust and China Changjiang 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 China Changjiang Mining are associated (or correlated) with Ashford Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashford Hospitality Trust has no effect on the direction of China Changjiang i.e., China Changjiang and Ashford Hospitality go up and down completely randomly.
Pair Corralation between China Changjiang and Ashford Hospitality
Given the investment horizon of 90 days China Changjiang Mining is expected to generate 17.38 times more return on investment than Ashford Hospitality. However, China Changjiang is 17.38 times more volatile than Ashford Hospitality Trust. It trades about 0.07 of its potential returns per unit of risk. Ashford Hospitality Trust is currently generating about 0.02 per unit of risk. If you would invest 13.00 in China Changjiang Mining on September 12, 2024 and sell it today you would lose (10.23) from holding China Changjiang Mining or give up 78.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Changjiang Mining vs. Ashford Hospitality Trust
Performance |
| Timeline |
| China Changjiang Mining |
| Ashford Hospitality Trust |
China Changjiang and Ashford Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Changjiang and Ashford Hospitality
The main advantage of trading using opposite China Changjiang and Ashford Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Changjiang position performs unexpectedly, Ashford 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 Ashford Hospitality will offset losses from the drop in Ashford Hospitality's long position.| China Changjiang vs. Kite Realty Group | China Changjiang vs. Titan Machinery | China Changjiang vs. Verra Mobility Corp | China Changjiang vs. Mesa Air Group |
| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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