Correlation Between Stratasys and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both Stratasys and RLJ Lodging 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 Stratasys and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stratasys and RLJ Lodging Trust, you can compare the effects of market volatilities on Stratasys and RLJ Lodging 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 Stratasys with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stratasys and RLJ Lodging.
Diversification Opportunities for Stratasys and RLJ Lodging
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stratasys and RLJ is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Stratasys and RLJ Lodging Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLJ Lodging Trust and Stratasys 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 Stratasys are associated (or correlated) with RLJ Lodging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLJ Lodging Trust has no effect on the direction of Stratasys i.e., Stratasys and RLJ Lodging go up and down completely randomly.
Pair Corralation between Stratasys and RLJ Lodging
Given the investment horizon of 90 days Stratasys is expected to generate 2.67 times more return on investment than RLJ Lodging. However, Stratasys is 2.67 times more volatile than RLJ Lodging Trust. It trades about 0.14 of its potential returns per unit of risk. RLJ Lodging Trust is currently generating about 0.1 per unit of risk. If you would invest 697.00 in Stratasys on September 2, 2024 and sell it today you would earn a total of 265.00 from holding Stratasys or generate 38.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stratasys vs. RLJ Lodging Trust
Performance |
| Timeline |
| Stratasys |
| RLJ Lodging Trust |
Stratasys and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stratasys and RLJ Lodging
The main advantage of trading using opposite Stratasys and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stratasys position performs unexpectedly, RLJ Lodging 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 RLJ Lodging will offset losses from the drop in RLJ Lodging's long position.| Stratasys vs. Nano Dimension | Stratasys vs. IONQ Inc | Stratasys vs. D Wave Quantum | Stratasys vs. Desktop Metal |
| RLJ Lodging vs. Sunstone Hotel Investors | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging vs. Summit Hotel Properties | RLJ Lodging vs. Ryman Hospitality Properties |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |