Correlation Between RLJ Lodging and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both RLJ Lodging and Haverty Furniture 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 Haverty Furniture 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 Haverty Furniture Companies, you can compare the effects of market volatilities on RLJ Lodging and Haverty Furniture 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 Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and Haverty Furniture.
Diversification Opportunities for RLJ Lodging and Haverty Furniture
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RLJ and Haverty is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture 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 Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and Haverty Furniture go up and down completely randomly.
Pair Corralation between RLJ Lodging and Haverty Furniture
Considering the 90-day investment horizon RLJ Lodging Trust is expected to under-perform the Haverty Furniture. But the stock apears to be less risky and, when comparing its historical volatility, RLJ Lodging Trust is 1.23 times less risky than Haverty Furniture. The stock trades about -0.42 of its potential returns per unit of risk. The Haverty Furniture Companies is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 2,220 in Haverty Furniture Companies on January 7, 2025 and sell it today you would lose (346.00) from holding Haverty Furniture Companies or give up 15.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
RLJ Lodging Trust vs. Haverty Furniture Companies
Performance |
| Timeline |
| RLJ Lodging Trust |
| Haverty Furniture |
RLJ Lodging and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and Haverty Furniture
The main advantage of trading using opposite RLJ Lodging and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture'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 |
| Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures | Haverty Furniture vs. Kirklands | Haverty Furniture vs. Arhaus Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |