Correlation Between SUPER HI and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both SUPER HI 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 SUPER HI and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUPER HI INTERNATIONAL and RLJ Lodging Trust, you can compare the effects of market volatilities on SUPER HI 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 SUPER HI with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUPER HI and RLJ Lodging.
Diversification Opportunities for SUPER HI and RLJ Lodging
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SUPER and RLJ is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SUPER HI INTERNATIONAL 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 SUPER HI 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 SUPER HI INTERNATIONAL 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 SUPER HI i.e., SUPER HI and RLJ Lodging go up and down completely randomly.
Pair Corralation between SUPER HI and RLJ Lodging
Considering the 90-day investment horizon SUPER HI is expected to generate 3.33 times less return on investment than RLJ Lodging. In addition to that, SUPER HI is 1.36 times more volatile than RLJ Lodging Trust. It trades about 0.07 of its total potential returns per unit of risk. RLJ Lodging Trust is currently generating about 0.3 per unit of volatility. If you would invest 909.00 in RLJ Lodging Trust on August 31, 2024 and sell it today you would earn a total of 105.00 from holding RLJ Lodging Trust or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUPER HI INTERNATIONAL vs. RLJ Lodging Trust
Performance |
| Timeline |
| SUPER HI INTERNATIONAL |
| RLJ Lodging Trust |
SUPER HI and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUPER HI and RLJ Lodging
The main advantage of trading using opposite SUPER HI and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUPER HI 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.| SUPER HI vs. RLJ Lodging Trust | SUPER HI vs. Aquagold International | SUPER HI vs. Stepstone Group | SUPER HI vs. Morningstar Unconstrained Allocation |
| RLJ Lodging vs. Sunstone Hotel Investors | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging vs. Ryman Hospitality Properties | RLJ Lodging vs. Xenia Hotels Resorts |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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