Correlation Between RLJ Lodging and WideOpenWest
Can any of the company-specific risk be diversified away by investing in both RLJ Lodging and WideOpenWest 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 WideOpenWest 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 WideOpenWest, you can compare the effects of market volatilities on RLJ Lodging and WideOpenWest 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 WideOpenWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and WideOpenWest.
Diversification Opportunities for RLJ Lodging and WideOpenWest
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between RLJ and WideOpenWest is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and WideOpenWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WideOpenWest 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 WideOpenWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WideOpenWest has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and WideOpenWest go up and down completely randomly.
Pair Corralation between RLJ Lodging and WideOpenWest
Considering the 90-day investment horizon RLJ Lodging Trust is expected to generate 0.78 times more return on investment than WideOpenWest. However, RLJ Lodging Trust is 1.29 times less risky than WideOpenWest. It trades about 0.3 of its potential returns per unit of risk. WideOpenWest is currently generating about 0.1 per unit of risk. If you would invest 909.00 in RLJ Lodging Trust on August 31, 2024 and sell it today you would earn a total of 105.00 from holding RLJ Lodging Trust or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLJ Lodging Trust vs. WideOpenWest
Performance |
| Timeline |
| RLJ Lodging Trust |
| WideOpenWest |
RLJ Lodging and WideOpenWest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and WideOpenWest
The main advantage of trading using opposite RLJ Lodging and WideOpenWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, WideOpenWest 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 WideOpenWest will offset losses from the drop in WideOpenWest's long position.| RLJ Lodging vs. Sunstone Hotel Investors | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging vs. Ryman Hospitality Properties | RLJ Lodging vs. Chatham Lodging Trust |
| WideOpenWest vs. RLJ Lodging Trust | WideOpenWest vs. Aquagold International | WideOpenWest vs. Stepstone Group | WideOpenWest vs. Morningstar Unconstrained Allocation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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