Correlation Between ASHFORD HOSPITTRUST and Oji Holdings

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

By analyzing existing cross correlation between ASHFORD HOSPITTRUST and Oji Holdings, you can compare the effects of market volatilities on ASHFORD HOSPITTRUST and Oji Holdings 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 HOSPITTRUST with a short position of Oji Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASHFORD HOSPITTRUST and Oji Holdings.

Diversification Opportunities for ASHFORD HOSPITTRUST and Oji Holdings

0.77

Correlation Coefficient

ASHFORD HOSPITTRUST  Oji Holdings

Poor diversification

The 3 months correlation between ASHFORD and Oji is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ASHFORD HOSPITTRUST and Oji Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oji Holdings and ASHFORD HOSPITTRUST 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 HOSPITTRUST are associated (or correlated) with Oji Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oji Holdings has no effect on the direction of ASHFORD HOSPITTRUST i.e., ASHFORD HOSPITTRUST and Oji Holdings go up and down completely randomly.

Pair Corralation between ASHFORD HOSPITTRUST and Oji Holdings

Assuming the 90 days horizon ASHFORD HOSPITTRUST is expected to under-perform the Oji Holdings. In addition to that, ASHFORD HOSPITTRUST is 1.85 times more volatile than Oji Holdings. It trades about -0.13 of its total potential returns per unit of risk. Oji Holdings is currently generating about -0.01 per unit of volatility. If you would invest  362.00  in Oji Holdings on September 15, 2024 and sell it today you would lose (8.00) from holding Oji Holdings or give up 2.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

ASHFORD HOSPITTRUST  vs.  Oji Holdings

ASHFORD HOSPITTRUST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASHFORD HOSPITTRUST has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Oji Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oji Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Oji Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ASHFORD HOSPITTRUST and Oji Holdings

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

The idea behind ASHFORD HOSPITTRUST and Oji Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.