Correlation Between BRAEMAR HOTELS and Sinopharm Group

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

By analyzing existing cross correlation between BRAEMAR HOTELS RES and Sinopharm Group Co, you can compare the effects of market volatilities on BRAEMAR HOTELS and Sinopharm Group 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 BRAEMAR HOTELS with a short position of Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRAEMAR HOTELS and Sinopharm Group.

Diversification Opportunities for BRAEMAR HOTELS and Sinopharm Group

-0.21

Correlation Coefficient

BRAEMAR HOTELS  Sinopharm Group

Very good diversification

The 3 months correlation between BRAEMAR and Sinopharm is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BRAEMAR HOTELS RES and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group and BRAEMAR 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 BRAEMAR HOTELS RES are associated (or correlated) with Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of BRAEMAR HOTELS i.e., BRAEMAR HOTELS and Sinopharm Group go up and down completely randomly.

Pair Corralation between BRAEMAR HOTELS and Sinopharm Group

Assuming the 90 days horizon BRAEMAR HOTELS RES is expected to generate 2.18 times more return on investment than Sinopharm Group. However, BRAEMAR HOTELS is 2.18 times more volatile than Sinopharm Group Co. It trades about -0.04 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about -0.17 per unit of risk. If you would invest  303.00  in BRAEMAR HOTELS RES on December 23, 2024 and sell it today you would lose (31.00) from holding BRAEMAR HOTELS RES or give up 10.23% of portfolio value over 90 days.

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

BRAEMAR HOTELS RES  vs.  Sinopharm Group Co

BRAEMAR HOTELS RES

Risk-Adjusted Performance

Very Weak

Over the last 90 days BRAEMAR HOTELS RES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the 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.

Sinopharm Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sinopharm Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with BRAEMAR HOTELS and Sinopharm Group

The main advantage of trading using opposite BRAEMAR HOTELS and Sinopharm Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRAEMAR HOTELS position performs unexpectedly, Sinopharm Group 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 Sinopharm Group will offset losses from the drop in Sinopharm Group's long position.

The idea behind BRAEMAR HOTELS RES and Sinopharm Group Co 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.