Correlation Between Chatham Lodging and Ryman Hospitality
Can any of the company-specific risk be diversified away by investing in both Chatham Lodging and Ryman Hospitality 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 Ryman Hospitality 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 Ryman Hospitality Properties, you can compare the effects of market volatilities on Chatham Lodging and Ryman Hospitality 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 Ryman Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chatham Lodging and Ryman Hospitality.
Diversification Opportunities for Chatham Lodging and Ryman Hospitality
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chatham and Ryman is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chatham Lodging Trust and Ryman Hospitality Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Hospitality 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 Ryman Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Hospitality has no effect on the direction of Chatham Lodging i.e., Chatham Lodging and Ryman Hospitality go up and down completely randomly.
Pair Corralation between Chatham Lodging and Ryman Hospitality
Given the investment horizon of 90 days Chatham Lodging Trust is expected to under-perform the Ryman Hospitality. In addition to that, Chatham Lodging is 1.22 times more volatile than Ryman Hospitality Properties. It trades about -0.03 of its total potential returns per unit of risk. Ryman Hospitality Properties is currently generating about 0.03 per unit of volatility. If you would invest 8,585 in Ryman Hospitality Properties on November 2, 2024 and sell it today you would earn a total of 1,963 from holding Ryman Hospitality Properties or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Chatham Lodging Trust vs. Ryman Hospitality Properties
Performance |
| Timeline |
| Chatham Lodging Trust |
| Ryman Hospitality |
Chatham Lodging and Ryman Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chatham Lodging and Ryman Hospitality
The main advantage of trading using opposite Chatham Lodging and Ryman Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chatham Lodging position performs unexpectedly, Ryman Hospitality 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 Ryman Hospitality will offset losses from the drop in Ryman Hospitality'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 |
| Ryman Hospitality vs. RLJ Lodging Trust | Ryman Hospitality vs. Pebblebrook Hotel Trust | Ryman Hospitality vs. Xenia Hotels Resorts | Ryman Hospitality vs. Sunstone Hotel Investors |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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