Correlation Between Ashford Hospitality and Four Corners

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

By analyzing existing cross correlation between Ashford Hospitality Trust and Four Corners Property, you can compare the effects of market volatilities on Ashford Hospitality and Four Corners 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 Ashford Hospitality with a short position of Four Corners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Four Corners.

Diversification Opportunities for Ashford Hospitality and Four Corners

-0.44

Correlation Coefficient

Ashford Hospitality  Four Corners

Very good diversification

The 3 months correlation between Ashford and Four is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Four Corners Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Corners Property and Ashford 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 Ashford Hospitality Trust are associated (or correlated) with Four Corners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Corners Property has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Four Corners go up and down completely randomly.

Pair Corralation between Ashford Hospitality and Four Corners

Considering the 90-day investment horizon Ashford Hospitality Trust is expected to generate 2.42 times more return on investment than Four Corners. However, Ashford Hospitality is 2.42 times more volatile than Four Corners Property. It trades about 0.05 of its potential returns per unit of risk. Four Corners Property is currently generating about -0.11 per unit of risk. If you would invest  598.00  in Ashford Hospitality Trust on May 6, 2025 and sell it today you would earn a total of  37.00  from holding Ashford Hospitality Trust or generate 6.19% return on investment over 90 days.

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

Ashford Hospitality Trust  vs.  Four Corners Property

Ashford Hospitality Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ashford Hospitality Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical indicators, Ashford Hospitality may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Four Corners Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Four Corners Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ashford Hospitality and Four Corners

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

The idea behind Ashford Hospitality Trust and Four Corners Property 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.