Correlation Between Ryman Hospitality and Braemar Hotel

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

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

Diversification Opportunities for Ryman Hospitality and Braemar Hotel

-0.17

Correlation Coefficient

Ryman Hospitality  Braemar Hotel

Good diversification

The 3 months correlation between Ryman and Braemar is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Hospitality Properties and Braemar Hotel Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braemar Hotel Resorts and Ryman 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 Ryman Hospitality Properties are associated (or correlated) with Braemar Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braemar Hotel Resorts has no effect on the direction of Ryman Hospitality i.e., Ryman Hospitality and Braemar Hotel go up and down completely randomly.

Pair Corralation between Ryman Hospitality and Braemar Hotel

Considering the 90-day investment horizon Ryman Hospitality Properties is expected to generate 0.55 times more return on investment than Braemar Hotel. However, Ryman Hospitality Properties is 1.83 times less risky than Braemar Hotel. It trades about -0.11 of its potential returns per unit of risk. Braemar Hotel Resorts is currently generating about -0.06 per unit of risk. If you would invest  10,490  in Ryman Hospitality Properties on December 28, 2024 and sell it today you would lose (1,145) from holding Ryman Hospitality Properties or give up 10.92% of portfolio value over 90 days.

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

Ryman Hospitality Properties  vs.  Braemar Hotel Resorts

Ryman Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ryman Hospitality Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest sluggish performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Braemar Hotel Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Braemar Hotel Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Ryman Hospitality and Braemar Hotel

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

The idea behind Ryman Hospitality Properties and Braemar Hotel Resorts 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.