Correlation Between Ashford Hospitality and Jd

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

Diversification Opportunities for Ashford Hospitality and Jd

-0.16

Correlation Coefficient

Ashford Hospitality  Jd

Good diversification

The 3 months correlation between Ashford and Jd is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Jd Com Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jd Com Inc 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 Jd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jd Com Inc has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Jd go up and down completely randomly.

Pair Corralation between Ashford Hospitality and Jd

Considering the 90-day investment horizon Ashford Hospitality is expected to generate 3.18 times less return on investment than Jd. In addition to that, Ashford Hospitality is 1.21 times more volatile than Jd Com Inc. It trades about 0.02 of its total potential returns per unit of risk. Jd Com Inc is currently generating about 0.07 per unit of volatility. If you would invest  1,850  in Jd Com Inc on December 27, 2024 and sell it today you would earn a total of  250.00  from holding Jd Com Inc or generate 13.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Ashford Hospitality Trust  vs.  Jd Com Inc

Ashford Hospitality Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ashford Hospitality Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Ashford Hospitality is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Jd Com Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jd Com Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, Jd reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ashford Hospitality and Jd

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

The idea behind Ashford Hospitality Trust and Jd Com Inc 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.