Correlation Between Ashford Hospitality and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Affiliated Managers 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 Ashford Hospitality and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashford Hospitality Trust and Affiliated Managers Group,, you can compare the effects of market volatilities on Ashford Hospitality and Affiliated Managers 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 Ashford Hospitality with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Affiliated Managers.
Diversification Opportunities for Ashford Hospitality and Affiliated Managers
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashford and Affiliated is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Affiliated Managers Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and Ashford Hospitality 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 Ashford Hospitality Trust are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Affiliated Managers go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Affiliated Managers
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to under-perform the Affiliated Managers. In addition to that, Ashford Hospitality is 3.92 times more volatile than Affiliated Managers Group,. It trades about -0.14 of its total potential returns per unit of risk. Affiliated Managers Group, is currently generating about -0.18 per unit of volatility. If you would invest 1,797 in Affiliated Managers Group, on September 26, 2024 and sell it today you would lose (177.00) from holding Affiliated Managers Group, or give up 9.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ashford Hospitality Trust vs. Affiliated Managers Group,
Performance |
Timeline |
Ashford Hospitality Trust |
Affiliated Managers |
Ashford Hospitality and Affiliated Managers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ashford Hospitality and Affiliated Managers
The main advantage of trading using opposite Ashford Hospitality and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.Ashford Hospitality vs. Ashford Hospitality Trust | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Ashford Hospitality Trust |
Affiliated Managers vs. Affiliated Managers Group, | Affiliated Managers vs. Southern Company Series | Affiliated Managers vs. Affiliated Managers Group | Affiliated Managers vs. Southern Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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