Correlation Between AT S and BRAEMAR HOTELS

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

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

Diversification Opportunities for AT S and BRAEMAR HOTELS

-0.71

Correlation Coefficient

AT S  BRAEMAR HOTELS

Pay attention - limited upside

The 3 months correlation between AUS and BRAEMAR is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES and AT S 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 AT S Austria are associated (or correlated) with BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of AT S i.e., AT S and BRAEMAR HOTELS go up and down completely randomly.

Pair Corralation between AT S and BRAEMAR HOTELS

Assuming the 90 days horizon AT S Austria is expected to under-perform the BRAEMAR HOTELS. But the stock apears to be less risky and, when comparing its historical volatility, AT S Austria is 1.18 times less risky than BRAEMAR HOTELS. The stock trades about -0.11 of its potential returns per unit of risk. The BRAEMAR HOTELS RES is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  232.00  in BRAEMAR HOTELS RES on October 7, 2024 and sell it today you would earn a total of  58.00  from holding BRAEMAR HOTELS RES or generate 25.0% return on investment over 90 days.

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

AT S Austria  vs.  BRAEMAR HOTELS RES

AT S Austria

Risk-Adjusted Performance

0 of 100

Very Weak

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

BRAEMAR HOTELS RES

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with AT S and BRAEMAR HOTELS

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

The idea behind AT S Austria and BRAEMAR HOTELS RES 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.