Correlation Between Newhydrogen and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both Newhydrogen 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 Newhydrogen and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newhydrogen and RLJ Lodging Trust, you can compare the effects of market volatilities on Newhydrogen 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 Newhydrogen with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newhydrogen and RLJ Lodging.
Diversification Opportunities for Newhydrogen and RLJ Lodging
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newhydrogen and RLJ is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Newhydrogen 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 Newhydrogen 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 Newhydrogen 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 Newhydrogen i.e., Newhydrogen and RLJ Lodging go up and down completely randomly.
Pair Corralation between Newhydrogen and RLJ Lodging
Given the investment horizon of 90 days Newhydrogen is expected to generate 11.93 times more return on investment than RLJ Lodging. However, Newhydrogen is 11.93 times more volatile than RLJ Lodging Trust. It trades about 0.11 of its potential returns per unit of risk. RLJ Lodging Trust is currently generating about -0.08 per unit of risk. If you would invest 0.35 in Newhydrogen on November 4, 2024 and sell it today you would earn a total of 0.06 from holding Newhydrogen or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newhydrogen vs. RLJ Lodging Trust
Performance |
| Timeline |
| Newhydrogen |
| RLJ Lodging Trust |
Newhydrogen and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newhydrogen and RLJ Lodging
The main advantage of trading using opposite Newhydrogen and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newhydrogen 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.| Newhydrogen vs. Solar Integrated Roofing | Newhydrogen vs. Ascent Solar Technologies, | Newhydrogen vs. SunHydrogen | Newhydrogen vs. Solar Alliance Energy |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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