Correlation Between YPF Sociedad and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both YPF Sociedad 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 YPF Sociedad and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YPF Sociedad Anonima and RLJ Lodging Trust, you can compare the effects of market volatilities on YPF Sociedad 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 YPF Sociedad with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of YPF Sociedad and RLJ Lodging.
Diversification Opportunities for YPF Sociedad and RLJ Lodging
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between YPF and RLJ is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding YPF Sociedad Anonima 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 YPF Sociedad 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 YPF Sociedad Anonima 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 YPF Sociedad i.e., YPF Sociedad and RLJ Lodging go up and down completely randomly.
Pair Corralation between YPF Sociedad and RLJ Lodging
Considering the 90-day investment horizon YPF Sociedad Anonima is expected to generate 2.12 times more return on investment than RLJ Lodging. However, YPF Sociedad is 2.12 times more volatile than RLJ Lodging Trust. It trades about -0.16 of its potential returns per unit of risk. RLJ Lodging Trust is currently generating about -0.36 per unit of risk. If you would invest 3,886 in YPF Sociedad Anonima on November 29, 2024 and sell it today you would lose (318.00) from holding YPF Sociedad Anonima or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YPF Sociedad Anonima vs. RLJ Lodging Trust
Performance |
| Timeline |
| YPF Sociedad Anonima |
| RLJ Lodging Trust |
YPF Sociedad and RLJ Lodging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YPF Sociedad and RLJ Lodging
The main advantage of trading using opposite YPF Sociedad and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YPF Sociedad 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.| YPF Sociedad vs. National Fuel Gas | YPF Sociedad vs. Eni SpA ADR | YPF Sociedad vs. Ecopetrol SA ADR | YPF Sociedad vs. TotalEnergies SE ADR |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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