Correlation Between RLJ Lodging and SUPER HI
Can any of the company-specific risk be diversified away by investing in both RLJ Lodging and SUPER HI 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 SUPER HI 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 SUPER HI INTERNATIONAL, you can compare the effects of market volatilities on RLJ Lodging and SUPER HI 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 SUPER HI. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and SUPER HI.
Diversification Opportunities for RLJ Lodging and SUPER HI
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RLJ and SUPER is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL 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 SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and SUPER HI go up and down completely randomly.
Pair Corralation between RLJ Lodging and SUPER HI
Considering the 90-day investment horizon RLJ Lodging is expected to generate 1.56 times less return on investment than SUPER HI. But when comparing it to its historical volatility, RLJ Lodging Trust is 2.59 times less risky than SUPER HI. It trades about 0.04 of its potential returns per unit of risk. SUPER HI INTERNATIONAL is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,027 in SUPER HI INTERNATIONAL on September 2, 2024 and sell it today you would earn a total of 26.00 from holding SUPER HI INTERNATIONAL or generate 1.28% 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. SUPER HI INTERNATIONAL
Performance |
| Timeline |
| RLJ Lodging Trust |
| SUPER HI INTERNATIONAL |
RLJ Lodging and SUPER HI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and SUPER HI
The main advantage of trading using opposite RLJ Lodging and SUPER HI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, SUPER HI 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 SUPER HI will offset losses from the drop in SUPER HI's long position.| RLJ Lodging vs. Sunstone Hotel Investors | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging vs. Summit Hotel Properties | RLJ Lodging vs. Ryman Hospitality Properties |
| SUPER HI vs. Integral Ad Science | SUPER HI vs. Radcom | SUPER HI vs. Verde Clean Fuels | SUPER HI vs. Sphere Entertainment Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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