Correlation Between RLJ Lodging and Thrivent High
Can any of the company-specific risk be diversified away by investing in both RLJ Lodging and Thrivent High 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 RLJ Lodging and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLJ Lodging Trust and Thrivent High Yield, you can compare the effects of market volatilities on RLJ Lodging and Thrivent High 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 RLJ Lodging with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and Thrivent High.
Diversification Opportunities for RLJ Lodging and Thrivent High
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RLJ and Thrivent is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and Thrivent High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent High Yield and RLJ Lodging 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 RLJ Lodging Trust are associated (or correlated) with Thrivent High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent High Yield has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and Thrivent High go up and down completely randomly.
Pair Corralation between RLJ Lodging and Thrivent High
Assuming the 90 days trading horizon RLJ Lodging Trust is expected to generate 2.52 times more return on investment than Thrivent High. However, RLJ Lodging is 2.52 times more volatile than Thrivent High Yield. It trades about 0.07 of its potential returns per unit of risk. Thrivent High Yield is currently generating about 0.16 per unit of risk. If you would invest 2,351 in RLJ Lodging Trust on August 27, 2024 and sell it today you would earn a total of 164.00 from holding RLJ Lodging Trust or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLJ Lodging Trust vs. Thrivent High Yield
Performance |
| Timeline |
| RLJ Lodging Trust |
| Thrivent High Yield |
RLJ Lodging and Thrivent High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and Thrivent High
The main advantage of trading using opposite RLJ Lodging and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, Thrivent High 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 Thrivent High will offset losses from the drop in Thrivent High's long position.| RLJ Lodging vs. Ashford Hospitality Trust | RLJ Lodging vs. Braemar Hotels Resorts | RLJ Lodging vs. Braemar Hotels Resorts | RLJ Lodging vs. Aspen Digital |
| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Income Fund | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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