Correlation Between Ready Capital and Apple Hospitality
Can any of the company-specific risk be diversified away by investing in both Ready Capital and Apple 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 Ready Capital and Apple Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ready Capital Corp and Apple Hospitality REIT, you can compare the effects of market volatilities on Ready Capital and Apple 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 Ready Capital with a short position of Apple Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ready Capital and Apple Hospitality.
Diversification Opportunities for Ready Capital and Apple Hospitality
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ready and Apple is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital Corp and Apple Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Hospitality REIT and Ready Capital 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 Ready Capital Corp are associated (or correlated) with Apple Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Hospitality REIT has no effect on the direction of Ready Capital i.e., Ready Capital and Apple Hospitality go up and down completely randomly.
Pair Corralation between Ready Capital and Apple Hospitality
Allowing for the 90-day total investment horizon Ready Capital Corp is expected to under-perform the Apple Hospitality. In addition to that, Ready Capital is 1.11 times more volatile than Apple Hospitality REIT. It trades about -0.13 of its total potential returns per unit of risk. Apple Hospitality REIT is currently generating about 0.08 per unit of volatility. If you would invest 1,468 in Apple Hospitality REIT on August 27, 2024 and sell it today you would earn a total of 143.00 from holding Apple Hospitality REIT or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ready Capital Corp vs. Apple Hospitality REIT
Performance |
| Timeline |
| Ready Capital Corp |
| Apple Hospitality REIT |
Ready Capital and Apple Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ready Capital and Apple Hospitality
The main advantage of trading using opposite Ready Capital and Apple Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ready Capital position performs unexpectedly, Apple 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 Apple Hospitality will offset losses from the drop in Apple Hospitality's long position.| Ready Capital vs. Blackstone Mortgage Trust | Ready Capital vs. Omega Healthcare Investors | Ready Capital vs. Medical Properties Trust |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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