Correlation Between BRT Realty and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both BRT Realty 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 BRT Realty and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRT Realty Trust and RLJ Lodging Trust, you can compare the effects of market volatilities on BRT Realty 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 BRT Realty with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRT Realty and RLJ Lodging.
Diversification Opportunities for BRT Realty and RLJ Lodging
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BRT and RLJ is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BRT Realty Trust 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 BRT Realty 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 BRT Realty Trust 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 BRT Realty i.e., BRT Realty and RLJ Lodging go up and down completely randomly.
Pair Corralation between BRT Realty and RLJ Lodging
Considering the 90-day investment horizon BRT Realty Trust is expected to generate 1.13 times more return on investment than RLJ Lodging. However, BRT Realty is 1.13 times more volatile than RLJ Lodging Trust. It trades about 0.0 of its potential returns per unit of risk. RLJ Lodging Trust is currently generating about -0.01 per unit of risk. If you would invest 1,923 in BRT Realty Trust on November 2, 2024 and sell it today you would lose (180.00) from holding BRT Realty Trust or give up 9.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BRT Realty Trust vs. RLJ Lodging Trust
Performance |
| Timeline |
| BRT Realty Trust |
| RLJ Lodging Trust |
BRT Realty and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRT Realty and RLJ Lodging
The main advantage of trading using opposite BRT Realty and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRT Realty 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.| BRT Realty vs. Nexpoint Residential Trust | BRT Realty vs. Centerspace | BRT Realty vs. Veris Residential | BRT Realty vs. Apartment Investment and |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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