Correlation Between RLJ Lodging and LXP Industrial
Can any of the company-specific risk be diversified away by investing in both RLJ Lodging and LXP Industrial 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 LXP Industrial 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 LXP Industrial Trust, you can compare the effects of market volatilities on RLJ Lodging and LXP Industrial 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 LXP Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and LXP Industrial.
Diversification Opportunities for RLJ Lodging and LXP Industrial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RLJ and LXP is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and LXP Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LXP Industrial Trust 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 LXP Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LXP Industrial Trust has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and LXP Industrial go up and down completely randomly.
Pair Corralation between RLJ Lodging and LXP Industrial
Considering the 90-day investment horizon RLJ Lodging Trust is expected to under-perform the LXP Industrial. In addition to that, RLJ Lodging is 1.05 times more volatile than LXP Industrial Trust. It trades about -0.02 of its total potential returns per unit of risk. LXP Industrial Trust is currently generating about -0.01 per unit of volatility. If you would invest 882.00 in LXP Industrial Trust on November 9, 2024 and sell it today you would lose (44.00) from holding LXP Industrial Trust or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLJ Lodging Trust vs. LXP Industrial Trust
Performance |
| Timeline |
| RLJ Lodging Trust |
| LXP Industrial Trust |
RLJ Lodging and LXP Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and LXP Industrial
The main advantage of trading using opposite RLJ Lodging and LXP Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, LXP Industrial 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 LXP Industrial will offset losses from the drop in LXP Industrial'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 |
| LXP Industrial vs. First Industrial Realty | LXP Industrial vs. Plymouth Industrial REIT | LXP Industrial vs. Global Self Storage | LXP Industrial vs. Terreno Realty |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |