Correlation Between Xenia Hotels and Ashford Hospitality
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels 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 Xenia Hotels and Ashford Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenia Hotels Resorts and Ashford Hospitality Trust, you can compare the effects of market volatilities on Xenia Hotels 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 Xenia Hotels with a short position of Ashford Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Ashford Hospitality.
Diversification Opportunities for Xenia Hotels and Ashford Hospitality
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenia and Ashford is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts 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 Xenia Hotels 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 Xenia Hotels Resorts 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 Xenia Hotels i.e., Xenia Hotels and Ashford Hospitality go up and down completely randomly.
Pair Corralation between Xenia Hotels and Ashford Hospitality
Considering the 90-day investment horizon Xenia Hotels is expected to generate 1.49 times less return on investment than Ashford Hospitality. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.64 times less risky than Ashford Hospitality. It trades about 0.02 of its potential returns per unit of risk. Ashford Hospitality Trust is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,387 in Ashford Hospitality Trust on November 2, 2024 and sell it today you would earn a total of 63.00 from holding Ashford Hospitality Trust or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Ashford Hospitality Trust
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Ashford Hospitality Trust |
Xenia Hotels and Ashford Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Ashford Hospitality
The main advantage of trading using opposite Xenia Hotels and Ashford Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels 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.| Xenia Hotels vs. RLJ Lodging Trust | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Pebblebrook Hotel Trust | Xenia Hotels vs. Summit Hotel Properties |
| Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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