Correlation Between NYSE Composite and Braemar Hotels
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Braemar Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Braemar Hotels Resorts, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Braemar Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Braemar Hotels.
Diversification Opportunities for NYSE Composite and Braemar Hotels
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Braemar is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Braemar Hotels go up and down completely randomly.
Pair Corralation between NYSE Composite and Braemar Hotels
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.48 times more return on investment than Braemar Hotels. However, NYSE Composite is 2.07 times less risky than Braemar Hotels. It trades about 0.13 of its potential returns per unit of risk. Braemar Hotels Resorts is currently generating about -0.18 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 37,406 from holding NYSE Composite or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Braemar Hotels Resorts
Performance |
| Timeline |
NYSE Composite and Braemar Hotels Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Braemar Hotels Resorts
Pair trading matchups for Braemar Hotels
Pair Trading with NYSE Composite and Braemar Hotels
The main advantage of trading using opposite NYSE Composite and Braemar Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Ashford Hospitality Trust | Braemar Hotels vs. Braemar Hotels Resorts | 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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