Correlation Between Aurora Innovation and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both Aurora Innovation 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 Aurora Innovation and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Innovation and RLJ Lodging Trust, you can compare the effects of market volatilities on Aurora Innovation 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 Aurora Innovation with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and RLJ Lodging.
Diversification Opportunities for Aurora Innovation and RLJ Lodging
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurora and RLJ is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation 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 Aurora Innovation 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 Aurora Innovation 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 Aurora Innovation i.e., Aurora Innovation and RLJ Lodging go up and down completely randomly.
Pair Corralation between Aurora Innovation and RLJ Lodging
Considering the 90-day investment horizon Aurora Innovation is expected to generate 3.48 times more return on investment than RLJ Lodging. However, Aurora Innovation is 3.48 times more volatile than RLJ Lodging Trust. It trades about 0.08 of its potential returns per unit of risk. RLJ Lodging Trust is currently generating about 0.0 per unit of risk. If you would invest 131.00 in Aurora Innovation on September 2, 2024 and sell it today you would earn a total of 516.00 from holding Aurora Innovation or generate 393.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Innovation vs. RLJ Lodging Trust
Performance |
| Timeline |
| Aurora Innovation |
| RLJ Lodging Trust |
Aurora Innovation and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Innovation and RLJ Lodging
The main advantage of trading using opposite Aurora Innovation and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Innovation 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.| Aurora Innovation vs. Innodata | Aurora Innovation vs. International Business Machines | Aurora Innovation vs. BigBearai Holdings | Aurora Innovation vs. CLPS Inc |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |