Correlation Between LXP Industrial and Apple Hospitality
Can any of the company-specific risk be diversified away by investing in both LXP Industrial and Apple 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 LXP Industrial and Apple Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LXP Industrial Trust and Apple Hospitality REIT, you can compare the effects of market volatilities on LXP Industrial and Apple 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 LXP Industrial with a short position of Apple Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of LXP Industrial and Apple Hospitality.
Diversification Opportunities for LXP Industrial and Apple Hospitality
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LXP and Apple is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding LXP Industrial Trust and Apple Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Hospitality REIT and LXP Industrial 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 LXP Industrial Trust are associated (or correlated) with Apple Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Hospitality REIT has no effect on the direction of LXP Industrial i.e., LXP Industrial and Apple Hospitality go up and down completely randomly.
Pair Corralation between LXP Industrial and Apple Hospitality
Considering the 90-day investment horizon LXP Industrial Trust is expected to under-perform the Apple Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, LXP Industrial Trust is 1.23 times less risky than Apple Hospitality. The stock trades about -0.05 of its potential returns per unit of risk. The Apple Hospitality REIT is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,502 in Apple Hospitality REIT on August 27, 2024 and sell it today you would earn a total of 109.00 from holding Apple Hospitality REIT or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LXP Industrial Trust vs. Apple Hospitality REIT
Performance |
| Timeline |
| LXP Industrial Trust |
| Apple Hospitality REIT |
LXP Industrial and Apple Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LXP Industrial and Apple Hospitality
The main advantage of trading using opposite LXP Industrial and Apple Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LXP Industrial position performs unexpectedly, Apple 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 Apple Hospitality will offset losses from the drop in Apple Hospitality's long position.| LXP Industrial vs. First Industrial Realty | LXP Industrial vs. Plymouth Industrial REIT | LXP Industrial vs. Global Self Storage | LXP Industrial vs. Terreno Realty |
| Apple Hospitality vs. Park Hotels Resorts | Apple Hospitality vs. Diamondrock Hospitality | Apple Hospitality vs. Ryman Hospitality Properties | Apple Hospitality vs. Pebblebrook Hotel 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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