Correlation Between Hersha Hospitality and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both Hersha Hospitality 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 Hersha Hospitality and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hersha Hospitality Trust and RLJ Lodging Trust, you can compare the effects of market volatilities on Hersha Hospitality 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 Hersha Hospitality with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hersha Hospitality and RLJ Lodging.
Diversification Opportunities for Hersha Hospitality and RLJ Lodging
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hersha and RLJ is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hersha Hospitality 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 Hersha Hospitality 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 Hersha Hospitality 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 Hersha Hospitality i.e., Hersha Hospitality and RLJ Lodging go up and down completely randomly.
Pair Corralation between Hersha Hospitality and RLJ Lodging
If you would invest 611.00 in Hersha Hospitality Trust on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Hersha Hospitality Trust or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Hersha Hospitality Trust vs. RLJ Lodging Trust
Performance |
| Timeline |
| Hersha Hospitality Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RLJ Lodging Trust |
Hersha Hospitality and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hersha Hospitality and RLJ Lodging
The main advantage of trading using opposite Hersha Hospitality and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hersha Hospitality 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.| Hersha Hospitality vs. RLJ Lodging Trust | Hersha Hospitality vs. Sunstone Hotel Investors | Hersha Hospitality vs. Pebblebrook Hotel Trust | Hersha Hospitality vs. Summit Hotel Properties |
| RLJ Lodging vs. Diamondrock Hospitality | RLJ Lodging vs. Summit Hotel Properties | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |