Correlation Between Regional Health and Ashford Hospitality
Can any of the company-specific risk be diversified away by investing in both Regional Health and Ashford 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 Regional Health and Ashford Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Health Properties and Ashford Hospitality Trust, you can compare the effects of market volatilities on Regional Health and Ashford 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 Regional Health with a short position of Ashford Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Health and Ashford Hospitality.
Diversification Opportunities for Regional Health and Ashford Hospitality
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Regional and Ashford is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Regional Health Properties and Ashford Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashford Hospitality Trust and Regional Health 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 Regional Health Properties are associated (or correlated) with Ashford Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashford Hospitality Trust has no effect on the direction of Regional Health i.e., Regional Health and Ashford Hospitality go up and down completely randomly.
Pair Corralation between Regional Health and Ashford Hospitality
Considering the 90-day investment horizon Regional Health Properties is expected to generate 2.54 times more return on investment than Ashford Hospitality. However, Regional Health is 2.54 times more volatile than Ashford Hospitality Trust. It trades about 0.01 of its potential returns per unit of risk. Ashford Hospitality Trust is currently generating about -0.1 per unit of risk. If you would invest 185.00 in Regional Health Properties on September 12, 2024 and sell it today you would lose (21.02) from holding Regional Health Properties or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Health Properties vs. Ashford Hospitality Trust
Performance |
| Timeline |
| Regional Health Prop |
| Ashford Hospitality Trust |
Regional Health and Ashford Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Health and Ashford Hospitality
The main advantage of trading using opposite Regional Health and Ashford Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Health position performs unexpectedly, Ashford 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 Ashford Hospitality will offset losses from the drop in Ashford Hospitality's long position.| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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