Correlation Between Ashford Hospitality and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Host Hotels 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 Host Hotels 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 Host Hotels Resorts, you can compare the effects of market volatilities on Ashford Hospitality and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Host Hotels.
Diversification Opportunities for Ashford Hospitality and Host Hotels
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashford and Host is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Host Hotels go up and down completely randomly.
Pair Corralation between Ashford Hospitality and Host Hotels
Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 1.01 times more return on investment than Host Hotels. However, Ashford Hospitality is 1.01 times more volatile than Host Hotels Resorts. It trades about -0.01 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about -0.11 per unit of risk. If you would invest 1,454 in Ashford Hospitality Trust on January 26, 2024 and sell it today you would lose (10.00) from holding Ashford Hospitality Trust or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashford Hospitality Trust vs. Host Hotels Resorts
Performance |
| Timeline |
| Ashford Hospitality Trust |
| Host Hotels Resorts |
Ashford Hospitality and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashford Hospitality and Host Hotels
The main advantage of trading using opposite Ashford Hospitality and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Braemar Hotels Resorts | Ashford Hospitality vs. Summit Hotel Properties | Ashford Hospitality vs. Aspen Digital |
| Host Hotels vs. RLJ Lodging Trust | Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. Ryman Hospitality Properties |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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