Correlation Between Marex Group and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both Marex Group 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 Marex Group and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marex Group plc and RLJ Lodging Trust, you can compare the effects of market volatilities on Marex Group 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 Marex Group with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marex Group and RLJ Lodging.
Diversification Opportunities for Marex Group and RLJ Lodging
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marex and RLJ is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Marex Group plc 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 Marex Group 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 Marex Group plc 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 Marex Group i.e., Marex Group and RLJ Lodging go up and down completely randomly.
Pair Corralation between Marex Group and RLJ Lodging
Considering the 90-day investment horizon Marex Group plc is expected to generate 4.87 times more return on investment than RLJ Lodging. However, Marex Group is 4.87 times more volatile than RLJ Lodging Trust. It trades about 0.14 of its potential returns per unit of risk. RLJ Lodging Trust is currently generating about 0.07 per unit of risk. If you would invest 1,880 in Marex Group plc on November 3, 2024 and sell it today you would earn a total of 1,689 from holding Marex Group plc or generate 89.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.63% |
| Values | Daily Returns |
Marex Group plc vs. RLJ Lodging Trust
Performance |
| Timeline |
| Marex Group plc |
| RLJ Lodging Trust |
Marex Group and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marex Group and RLJ Lodging
The main advantage of trading using opposite Marex Group and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marex Group 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.| Marex Group vs. Ihuman Inc | Marex Group vs. flyExclusive, | Marex Group vs. NetEase | Marex Group vs. 51Talk Online Education |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |