Correlation Between Slate Office and Ashford Hospitality
Can any of the company-specific risk be diversified away by investing in both Slate Office 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 Slate Office and Ashford Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slate Office REIT and Ashford Hospitality Trust, you can compare the effects of market volatilities on Slate Office 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 Slate Office with a short position of Ashford Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Office and Ashford Hospitality.
Diversification Opportunities for Slate Office and Ashford Hospitality
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Slate and Ashford is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Slate Office REIT 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 Slate Office 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 Slate Office REIT 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 Slate Office i.e., Slate Office and Ashford Hospitality go up and down completely randomly.
Pair Corralation between Slate Office and Ashford Hospitality
Assuming the 90 days horizon Slate Office REIT is expected to under-perform the Ashford Hospitality. In addition to that, Slate Office is 2.99 times more volatile than Ashford Hospitality Trust. It trades about -0.3 of its total potential returns per unit of risk. Ashford Hospitality Trust is currently generating about -0.16 per unit of volatility. If you would invest 1,550 in Ashford Hospitality Trust on September 12, 2024 and sell it today you would lose (126.00) from holding Ashford Hospitality Trust or give up 8.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Slate Office REIT vs. Ashford Hospitality Trust
Performance |
| Timeline |
| Slate Office REIT |
| Ashford Hospitality Trust |
Slate Office and Ashford Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slate Office and Ashford Hospitality
The main advantage of trading using opposite Slate Office and Ashford Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slate Office 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.| Slate Office vs. Franklin Street Properties | Slate Office vs. Douglas Emmett | Slate Office vs. Highwoods Properties | Slate Office vs. Brandywine Realty Trust |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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