Correlation Between Chatham Lodging and Clipper Realty
Can any of the company-specific risk be diversified away by investing in both Chatham Lodging and Clipper Realty 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 Chatham Lodging and Clipper Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chatham Lodging Trust and Clipper Realty, you can compare the effects of market volatilities on Chatham Lodging and Clipper Realty 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 Chatham Lodging with a short position of Clipper Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chatham Lodging and Clipper Realty.
Diversification Opportunities for Chatham Lodging and Clipper Realty
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chatham and Clipper is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chatham Lodging Trust and Clipper Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Realty and Chatham Lodging 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 Chatham Lodging Trust are associated (or correlated) with Clipper Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Realty has no effect on the direction of Chatham Lodging i.e., Chatham Lodging and Clipper Realty go up and down completely randomly.
Pair Corralation between Chatham Lodging and Clipper Realty
Given the investment horizon of 90 days Chatham Lodging Trust is expected to under-perform the Clipper Realty. But the stock apears to be less risky and, when comparing its historical volatility, Chatham Lodging Trust is 1.81 times less risky than Clipper Realty. The stock trades about -0.03 of its potential returns per unit of risk. The Clipper Realty is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 588.00 in Clipper Realty on November 5, 2024 and sell it today you would lose (180.00) from holding Clipper Realty or give up 30.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chatham Lodging Trust vs. Clipper Realty
Performance |
| Timeline |
| Chatham Lodging Trust |
| Clipper Realty |
Chatham Lodging and Clipper Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chatham Lodging and Clipper Realty
The main advantage of trading using opposite Chatham Lodging and Clipper Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chatham Lodging position performs unexpectedly, Clipper Realty 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 Clipper Realty will offset losses from the drop in Clipper Realty's long position.| Chatham Lodging vs. Summit Hotel Properties | Chatham Lodging vs. RLJ Lodging Trust | Chatham Lodging vs. Pebblebrook Hotel Trust | Chatham Lodging vs. Whitestone REIT |
| Clipper Realty vs. Nexpoint Residential Trust | Clipper Realty vs. Centerspace | Clipper Realty vs. UDR Inc | Clipper Realty vs. BRT Realty Trust |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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