Correlation Between Globalstar, Common and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both Globalstar, Common 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 Globalstar, Common and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalstar, Common Stock and RLJ Lodging Trust, you can compare the effects of market volatilities on Globalstar, Common 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 Globalstar, Common with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalstar, Common and RLJ Lodging.
Diversification Opportunities for Globalstar, Common and RLJ Lodging
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globalstar, and RLJ is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Globalstar, Common Stock 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 Globalstar, Common 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 Globalstar, Common Stock 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 Globalstar, Common i.e., Globalstar, Common and RLJ Lodging go up and down completely randomly.
Pair Corralation between Globalstar, Common and RLJ Lodging
Given the investment horizon of 90 days Globalstar, Common Stock is expected to under-perform the RLJ Lodging. In addition to that, Globalstar, Common is 5.79 times more volatile than RLJ Lodging Trust. It trades about -0.17 of its total potential returns per unit of risk. RLJ Lodging Trust is currently generating about -0.36 per unit of volatility. If you would invest 1,001 in RLJ Lodging Trust on November 29, 2024 and sell it today you would lose (83.00) from holding RLJ Lodging Trust or give up 8.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalstar, Common Stock vs. RLJ Lodging Trust
Performance |
| Timeline |
| Globalstar, Common Stock |
| RLJ Lodging Trust |
Globalstar, Common and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalstar, Common and RLJ Lodging
The main advantage of trading using opposite Globalstar, Common and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalstar, Common 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.| Globalstar, Common vs. Iridium Communications | Globalstar, Common vs. Lumen Technologies | Globalstar, Common vs. InterDigital | Globalstar, Common vs. Cogent Communications Group |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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