Correlation Between RLJ Lodging and Oasis Hotel
Can any of the company-specific risk be diversified away by investing in both RLJ Lodging and Oasis Hotel 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 Oasis Hotel 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 Oasis Hotel Resort, you can compare the effects of market volatilities on RLJ Lodging and Oasis Hotel 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 Oasis Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and Oasis Hotel.
Diversification Opportunities for RLJ Lodging and Oasis Hotel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RLJ and Oasis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and Oasis Hotel Resort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Hotel Resort 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 Oasis Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Hotel Resort has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and Oasis Hotel go up and down completely randomly.
Pair Corralation between RLJ Lodging and Oasis Hotel
If you would invest 2,489 in RLJ Lodging Trust on November 2, 2024 and sell it today you would earn a total of 29.00 from holding RLJ Lodging Trust or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLJ Lodging Trust vs. Oasis Hotel Resort
Performance |
| Timeline |
| RLJ Lodging Trust |
| Oasis Hotel Resort |
RLJ Lodging and Oasis Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and Oasis Hotel
The main advantage of trading using opposite RLJ Lodging and Oasis Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, Oasis Hotel 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 Oasis Hotel will offset losses from the drop in Oasis Hotel's long position.| RLJ Lodging vs. Diamondrock Hospitality | RLJ Lodging vs. Summit Hotel Properties | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging vs. Sunstone Hotel Investors |
| Oasis Hotel vs. Palomar Holdings | Oasis Hotel vs. Life Insurance | Oasis Hotel vs. Sun Life Financial | Oasis Hotel vs. MGIC Investment Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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