Correlation Between American Hotel and Stroud Resources
Can any of the company-specific risk be diversified away by investing in both American Hotel and Stroud Resources 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 American Hotel and Stroud Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Stroud Resources, you can compare the effects of market volatilities on American Hotel and Stroud Resources 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 American Hotel with a short position of Stroud Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Stroud Resources.
Diversification Opportunities for American Hotel and Stroud Resources
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Stroud is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Stroud Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stroud Resources and American 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 American Hotel Income are associated (or correlated) with Stroud Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stroud Resources has no effect on the direction of American Hotel i.e., American Hotel and Stroud Resources go up and down completely randomly.
Pair Corralation between American Hotel and Stroud Resources
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Stroud Resources. But the stock apears to be less risky and, when comparing its historical volatility, American Hotel Income is 4.42 times less risky than Stroud Resources. The stock trades about -0.44 of its potential returns per unit of risk. The Stroud Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Stroud Resources on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Stroud Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Hotel Income vs. Stroud Resources
Performance |
| Timeline |
| American Hotel Income |
| Stroud Resources |
American Hotel and Stroud Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Stroud Resources
The main advantage of trading using opposite American Hotel and Stroud Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Stroud Resources 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 Stroud Resources will offset losses from the drop in Stroud Resources' long position.| American Hotel vs. Canadian Apartment Properties | American Hotel vs. Granite Real Estate | American Hotel vs. Choice Properties Real | American Hotel vs. HR Real Estate |
| Stroud Resources vs. Faction Investment Group | Stroud Resources vs. Highwood Asset Management | Stroud Resources vs. Canadian General Investments | Stroud Resources vs. American Hotel Income |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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