Correlation Between Braemar Hotels and Cal-Bay Intl

Can any of the company-specific risk be diversified away by investing in both Braemar Hotels and Cal-Bay Intl 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 Braemar Hotels and Cal-Bay Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Braemar Hotels Resorts and Cal Bay Intl, you can compare the effects of market volatilities on Braemar Hotels and Cal-Bay Intl 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 Braemar Hotels with a short position of Cal-Bay Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braemar Hotels and Cal-Bay Intl.

Diversification Opportunities for Braemar Hotels and Cal-Bay Intl

0.0

Correlation Coefficient

Braemar Hotels  Cal-Bay Intl

Pay attention - limited upside

The 3 months correlation between Braemar and Cal-Bay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Braemar Hotels Resorts and Cal Bay Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Bay Intl and Braemar Hotels 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 Braemar Hotels Resorts are associated (or correlated) with Cal-Bay Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Bay Intl has no effect on the direction of Braemar Hotels i.e., Braemar Hotels and Cal-Bay Intl go up and down completely randomly.

Pair Corralation between Braemar Hotels and Cal-Bay Intl

If you would invest  1,831  in Braemar Hotels Resorts on December 28, 2024 and sell it today you would earn a total of  276.00  from holding Braemar Hotels Resorts or generate 15.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Braemar Hotels Resorts  vs.  Cal Bay Intl

Braemar Hotels Resorts

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Braemar Hotels Resorts are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Braemar Hotels exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cal Bay Intl

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cal Bay Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cal-Bay Intl is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Braemar Hotels and Cal-Bay Intl

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

The idea behind Braemar Hotels Resorts and Cal Bay Intl 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.