Correlation Between NYSE Composite and Ashford Hospitality
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Ashford Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ashford Hospitality Trust, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Ashford Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ashford Hospitality.
Diversification Opportunities for NYSE Composite and Ashford Hospitality
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Ashford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Ashford Hospitality go up and down completely randomly.
Pair Corralation between NYSE Composite and Ashford Hospitality
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.36 times more return on investment than Ashford Hospitality. However, NYSE Composite is 2.81 times less risky than Ashford Hospitality. It trades about -0.12 of its potential returns per unit of risk. Ashford Hospitality Trust is currently generating about -0.15 per unit of risk. If you would invest 1,812,226 in NYSE Composite on February 5, 2024 and sell it today you would lose (32,437) from holding NYSE Composite or give up 1.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Ashford Hospitality Trust
Performance |
Timeline |
NYSE Composite and Ashford Hospitality Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ashford Hospitality Trust
Pair trading matchups for Ashford Hospitality
Pair Trading with NYSE Composite and Ashford Hospitality
The main advantage of trading using opposite NYSE Composite and Ashford Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.NYSE Composite vs. Bridgford Foods | NYSE Composite vs. SunOpta | NYSE Composite vs. Where Food Comes | NYSE Composite vs. Sligro Food Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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