Correlation Between Braemar Hotel and Cresud SACIF

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

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

Diversification Opportunities for Braemar Hotel and Cresud SACIF

0.57

Correlation Coefficient

Braemar Hotel  Cresud SACIF

Very weak diversification

The 3 months correlation between Braemar and Cresud is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Braemar Hotel Resorts and Cresud SACIF y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SACIF y and Braemar Hotel 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 Hotel Resorts are associated (or correlated) with Cresud SACIF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SACIF y has no effect on the direction of Braemar Hotel i.e., Braemar Hotel and Cresud SACIF go up and down completely randomly.

Pair Corralation between Braemar Hotel and Cresud SACIF

Considering the 90-day investment horizon Braemar Hotel is expected to generate 9.57 times less return on investment than Cresud SACIF. In addition to that, Braemar Hotel is 1.01 times more volatile than Cresud SACIF y. It trades about 0.03 of its total potential returns per unit of risk. Cresud SACIF y is currently generating about 0.26 per unit of volatility. If you would invest  844.00  in Cresud SACIF y on October 6, 2024 and sell it today you would earn a total of  500.00  from holding Cresud SACIF y or generate 59.24% return on investment over 90 days.

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

Braemar Hotel Resorts  vs.  Cresud SACIF y

Braemar Hotel Resorts

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Braemar Hotel Resorts are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Braemar Hotel is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Cresud SACIF y

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Braemar Hotel and Cresud SACIF

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

The idea behind Braemar Hotel Resorts and Cresud SACIF y 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.