Correlation Between Ashford Hospitality and Msif Real

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

Diversification Opportunities for Ashford Hospitality and Msif Real

-0.74

Correlation Coefficient

Ashford Hospitality  Msif Real

Pay attention - limited upside

The 3 months correlation between Ashford and Msif is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Msif Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif Real Estate 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 Msif Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif Real Estate has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Msif Real go up and down completely randomly.

Pair Corralation between Ashford Hospitality and Msif Real

Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to under-perform the Msif Real. In addition to that, Ashford Hospitality is 5.72 times more volatile than Msif Real Estate. It trades about -0.12 of its total potential returns per unit of risk. Msif Real Estate is currently generating about 0.01 per unit of volatility. If you would invest  1,023  in Msif Real Estate on September 24, 2024 and sell it today you would earn a total of  3.00  from holding Msif Real Estate or generate 0.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	70.31%
Values	Daily Returns

Ashford Hospitality Trust  vs.  Msif Real Estate

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 inconsistent performance in the last few months, the Preferred 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.

Msif Real Estate

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Msif Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Msif Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ashford Hospitality and Msif Real

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

The idea behind Ashford Hospitality Trust and Msif Real Estate 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.