Correlation Between Bank Central and Ashford
Can any of the company-specific risk be diversified away by investing in both Bank Central and Ashford 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 Bank Central and Ashford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Ashford, you can compare the effects of market volatilities on Bank Central and Ashford 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 Bank Central with a short position of Ashford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Ashford.
Diversification Opportunities for Bank Central and Ashford
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Ashford is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Ashford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashford and Bank Central 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 Bank Central Asia are associated (or correlated) with Ashford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashford has no effect on the direction of Bank Central i.e., Bank Central and Ashford go up and down completely randomly.
Pair Corralation between Bank Central and Ashford
Assuming the 90 days horizon Bank Central is expected to generate 5.66 times less return on investment than Ashford. But when comparing it to its historical volatility, Bank Central Asia is 6.57 times less risky than Ashford. It trades about 0.04 of its potential returns per unit of risk. Ashford is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Ashford on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Ashford or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.52% |
| Values | Daily Returns |
Bank Central Asia vs. Ashford
Performance |
| Timeline |
| Bank Central Asia |
| Ashford |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and Ashford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Ashford
The main advantage of trading using opposite Bank Central and Ashford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Ashford 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 will offset losses from the drop in Ashford's long position.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| Ashford vs. Braemar Hotel Resorts | Ashford vs. Conifer Holding | Ashford vs. Citizens Community Bancorp | Ashford vs. AstroNova |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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