Correlation Between Ryman Hospitality and Ashford Hospitality

Can any of the company-specific risk be diversified away by investing in both Ryman Hospitality 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 Ryman Hospitality and Ashford Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ryman Hospitality Properties and Ashford Hospitality Trust, you can compare the effects of market volatilities on Ryman Hospitality 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 Ryman Hospitality with a short position of Ashford Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryman Hospitality and Ashford Hospitality.

Diversification Opportunities for Ryman Hospitality and Ashford Hospitality

-0.65

Correlation Coefficient

Ryman Hospitality  Ashford Hospitality

Excellent diversification

The 3 months correlation between Ryman and Ashford is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Hospitality 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 Ryman 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 Ryman Hospitality 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 Ryman Hospitality i.e., Ryman Hospitality and Ashford Hospitality go up and down completely randomly.

Pair Corralation between Ryman Hospitality and Ashford Hospitality

Considering the 90-day investment horizon Ryman Hospitality Properties is expected to generate 0.52 times more return on investment than Ashford Hospitality. However, Ryman Hospitality Properties is 1.93 times less risky than Ashford Hospitality. It trades about 0.14 of its potential returns per unit of risk. Ashford Hospitality Trust is currently generating about -0.06 per unit of risk. If you would invest  9,998  in Ryman Hospitality Properties on September 16, 2024 and sell it today you would earn a total of  1,326  from holding Ryman Hospitality Properties or generate 13.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ryman Hospitality Properties  vs.  Ashford Hospitality Trust

Ryman Hospitality

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryman Hospitality Properties are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical indicators, Ryman Hospitality reported solid returns over the last few months and may actually be approaching a breakup point.

Ashford Hospitality Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ashford Hospitality Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Preferred Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ryman Hospitality and Ashford Hospitality

The main advantage of trading using opposite Ryman Hospitality and Ashford Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryman Hospitality 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.

The idea behind Ryman Hospitality Properties and Ashford Hospitality Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.