Correlation Between Ashford Hospitality and Altegris/aaca Opportunistic

Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic 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 Altegrisaaca Opportunistic Real, you can compare the effects of market volatilities on Ashford Hospitality and Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Altegris/aaca Opportunistic.

Diversification Opportunities for Ashford Hospitality and Altegris/aaca Opportunistic

-0.64

Correlation Coefficient

Ashford Hospitality  Altegris/aaca Opportunistic

Excellent diversification

The 3 months correlation between Ashford and Altegris/aaca is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Altegrisaaca Opportunistic Rea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris/aaca Opportunistic has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Altegris/aaca Opportunistic go up and down completely randomly.

Pair Corralation between Ashford Hospitality and Altegris/aaca Opportunistic

Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 1.3 times more return on investment than Altegris/aaca Opportunistic. However, Ashford Hospitality is 1.3 times more volatile than Altegrisaaca Opportunistic Real. It trades about 0.15 of its potential returns per unit of risk. Altegrisaaca Opportunistic Real is currently generating about -0.2 per unit of risk. If you would invest  1,304  in Ashford Hospitality Trust on December 29, 2024 and sell it today you would earn a total of  271.00  from holding Ashford Hospitality Trust or generate 20.78% return on investment over 90 days.

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

Ashford Hospitality Trust  vs.  Altegrisaaca Opportunistic Rea

Ashford Hospitality Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ashford Hospitality Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Ashford Hospitality reported solid returns over the last few months and may actually be approaching a breakup point.

Altegris/aaca Opportunistic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altegrisaaca Opportunistic Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Ashford Hospitality and Altegris/aaca Opportunistic

The main advantage of trading using opposite Ashford Hospitality and Altegris/aaca Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashford Hospitality position performs unexpectedly, Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic will offset losses from the drop in Altegris/aaca Opportunistic's long position.

The idea behind Ashford Hospitality Trust and Altegrisaaca Opportunistic Real 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.