Correlation Between RLJ Lodging and 00108WAF7
Specify exactly 2 symbols:
By analyzing existing cross correlation between RLJ Lodging Trust and AEP TEX INC, you can compare the effects of market volatilities on RLJ Lodging and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and 00108WAF7.
Diversification Opportunities for RLJ Lodging and 00108WAF7
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between RLJ and 00108WAF7 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and 00108WAF7 go up and down completely randomly.
Pair Corralation between RLJ Lodging and 00108WAF7
Assuming the 90 days trading horizon RLJ Lodging is expected to generate 404.38 times less return on investment than 00108WAF7. But when comparing it to its historical volatility, RLJ Lodging Trust is 221.78 times less risky than 00108WAF7. It trades about 0.07 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,792 in AEP TEX INC on October 11, 2024 and sell it today you would lose (124.00) from holding AEP TEX INC or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 64.04% |
| Values | Daily Returns |
RLJ Lodging Trust vs. AEP TEX INC
Performance |
| Timeline |
| RLJ Lodging Trust |
| AEP TEX INC |
RLJ Lodging and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and 00108WAF7
The main advantage of trading using opposite RLJ Lodging and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7'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 |
| 00108WAF7 vs. RLJ Lodging Trust | 00108WAF7 vs. Citigroup | 00108WAF7 vs. SEI Investments | 00108WAF7 vs. SM Investments |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |