Correlation Between Global Net and Braemar Hotels
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and Braemar Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Braemar Hotels Resorts, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of Braemar Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Braemar Hotels.
Diversification Opportunities for Global Net and Braemar Hotels
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Braemar is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease 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 Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and Braemar Hotels go up and down completely randomly.
Pair Corralation between Global Net and Braemar Hotels
Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Braemar Hotels. In addition to that, Global Net is 1.08 times more volatile than Braemar Hotels Resorts. It trades about -0.18 of its total potential returns per unit of risk. Braemar Hotels Resorts is currently generating about -0.18 per unit of volatility. If you would invest 2,189 in Braemar Hotels Resorts on August 24, 2024 and sell it today you would lose (121.00) from holding Braemar Hotels Resorts or give up 5.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Global Net Lease vs. Braemar Hotels Resorts
Performance |
Timeline |
Global Net Lease |
Braemar Hotels Resorts |
Global Net and Braemar Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Net and Braemar Hotels
The main advantage of trading using opposite Global Net and Braemar Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust | 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |