Correlation Between LuxUrban Hotels and American Healthcare

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

By analyzing existing cross correlation between LuxUrban Hotels 1300 and American Healthcare REIT,, you can compare the effects of market volatilities on LuxUrban Hotels and American Healthcare 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 LuxUrban Hotels with a short position of American Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of LuxUrban Hotels and American Healthcare.

Diversification Opportunities for LuxUrban Hotels and American Healthcare

-0.02

Correlation Coefficient

LuxUrban Hotels  American Healthcare

Good diversification

The 3 months correlation between LuxUrban and American is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding LuxUrban Hotels 1300 and American Healthcare REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Healthcare REIT, and LuxUrban 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 LuxUrban Hotels 1300 are associated (or correlated) with American Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Healthcare REIT, has no effect on the direction of LuxUrban Hotels i.e., LuxUrban Hotels and American Healthcare go up and down completely randomly.

Pair Corralation between LuxUrban Hotels and American Healthcare

Assuming the 90 days horizon LuxUrban Hotels 1300 is expected to under-perform the American Healthcare. In addition to that, LuxUrban Hotels is 5.09 times more volatile than American Healthcare REIT,. It trades about -0.31 of its total potential returns per unit of risk. American Healthcare REIT, is currently generating about 0.01 per unit of volatility. If you would invest  2,785  in American Healthcare REIT, on October 22, 2024 and sell it today you would earn a total of  5.00  from holding American Healthcare REIT, or generate 0.18% return on investment over 90 days.

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

LuxUrban Hotels 1300  vs.  American Healthcare REIT,

LuxUrban Hotels 1300

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LuxUrban Hotels 1300 has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's technical indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

American Healthcare REIT,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Healthcare REIT, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical indicators, American Healthcare reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LuxUrban Hotels and American Healthcare

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

The idea behind LuxUrban Hotels 1300 and American Healthcare REIT, 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.