Correlation Between AstroNova and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both AstroNova and RLJ Lodging 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 AstroNova and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstroNova and RLJ Lodging Trust, you can compare the effects of market volatilities on AstroNova and RLJ Lodging 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 AstroNova with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstroNova and RLJ Lodging.
Diversification Opportunities for AstroNova and RLJ Lodging
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AstroNova and RLJ is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and RLJ Lodging Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLJ Lodging Trust and AstroNova 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 AstroNova are associated (or correlated) with RLJ Lodging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLJ Lodging Trust has no effect on the direction of AstroNova i.e., AstroNova and RLJ Lodging go up and down completely randomly.
Pair Corralation between AstroNova and RLJ Lodging
Given the investment horizon of 90 days AstroNova is expected to generate 1.55 times more return on investment than RLJ Lodging. However, AstroNova is 1.55 times more volatile than RLJ Lodging Trust. It trades about 0.46 of its potential returns per unit of risk. RLJ Lodging Trust is currently generating about 0.47 per unit of risk. If you would invest 1,228 in AstroNova on September 2, 2024 and sell it today you would earn a total of 309.00 from holding AstroNova or generate 25.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AstroNova vs. RLJ Lodging Trust
Performance |
| Timeline |
| AstroNova |
| RLJ Lodging Trust |
AstroNova and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstroNova and RLJ Lodging
The main advantage of trading using opposite AstroNova and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova position performs unexpectedly, RLJ Lodging 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 RLJ Lodging will offset losses from the drop in RLJ Lodging's long position.| AstroNova vs. Key Tronic | AstroNova vs. Identiv | AstroNova vs. Red Cat Holdings | AstroNova vs. TransAct Technologies Incorporated |
| RLJ Lodging vs. Sunstone Hotel Investors | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging vs. Summit Hotel Properties | RLJ Lodging vs. Ryman Hospitality Properties |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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