Correlation Between RLJ Lodging and Grupo Televisa
Can any of the company-specific risk be diversified away by investing in both RLJ Lodging and Grupo Televisa 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 Grupo Televisa 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 Grupo Televisa SAB, you can compare the effects of market volatilities on RLJ Lodging and Grupo Televisa 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 Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and Grupo Televisa.
Diversification Opportunities for RLJ Lodging and Grupo Televisa
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between RLJ and Grupo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and Grupo Televisa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Televisa SAB 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 Grupo Televisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Televisa SAB has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and Grupo Televisa go up and down completely randomly.
Pair Corralation between RLJ Lodging and Grupo Televisa
Considering the 90-day investment horizon RLJ Lodging Trust is expected to generate 0.6 times more return on investment than Grupo Televisa. However, RLJ Lodging Trust is 1.67 times less risky than Grupo Televisa. It trades about 0.47 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.39 per unit of risk. If you would invest 877.00 in RLJ Lodging Trust on September 2, 2024 and sell it today you would earn a total of 144.00 from holding RLJ Lodging Trust or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLJ Lodging Trust vs. Grupo Televisa SAB
Performance |
| Timeline |
| RLJ Lodging Trust |
| Grupo Televisa SAB |
RLJ Lodging and Grupo Televisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and Grupo Televisa
The main advantage of trading using opposite RLJ Lodging and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, Grupo Televisa 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 Grupo Televisa will offset losses from the drop in Grupo Televisa'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 |
| Grupo Televisa vs. Liberty Global PLC | Grupo Televisa vs. Liberty Global PLC | Grupo Televisa vs. Liberty Broadband Srs | Grupo Televisa vs. Shenandoah Telecommunications 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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