Correlation Between Ashford Hospitality and Wetouch Technology

Can any of the company-specific risk be diversified away by investing in both Ashford Hospitality and Wetouch Technology 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 Wetouch Technology 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 Wetouch Technology Common, you can compare the effects of market volatilities on Ashford Hospitality and Wetouch Technology 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 Wetouch Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashford Hospitality and Wetouch Technology.

Diversification Opportunities for Ashford Hospitality and Wetouch Technology

0.3

Correlation Coefficient

Ashford Hospitality  Wetouch Technology

Weak diversification

The 3 months correlation between Ashford and Wetouch is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ashford Hospitality Trust and Wetouch Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wetouch Technology Common 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 Wetouch Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wetouch Technology Common has no effect on the direction of Ashford Hospitality i.e., Ashford Hospitality and Wetouch Technology go up and down completely randomly.

Pair Corralation between Ashford Hospitality and Wetouch Technology

Assuming the 90 days trading horizon Ashford Hospitality Trust is expected to generate 0.8 times more return on investment than Wetouch Technology. However, Ashford Hospitality Trust is 1.24 times less risky than Wetouch Technology. It trades about -0.02 of its potential returns per unit of risk. Wetouch Technology Common is currently generating about -0.1 per unit of risk. If you would invest  1,563  in Ashford Hospitality Trust on March 6, 2025 and sell it today you would lose (131.00) from holding Ashford Hospitality Trust or give up 8.38% of portfolio value over 90 days.

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

Ashford Hospitality Trust  vs.  Wetouch Technology Common

Ashford Hospitality Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashford Hospitality Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ashford Hospitality is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Wetouch Technology Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wetouch Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ashford Hospitality and Wetouch Technology

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

The idea behind Ashford Hospitality Trust and Wetouch Technology Common 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.