Correlation Between NH Foods and RLJ Lodging
Can any of the company-specific risk be diversified away by investing in both NH Foods 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 NH Foods and RLJ Lodging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods Ltd and RLJ Lodging Trust, you can compare the effects of market volatilities on NH Foods 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 NH Foods with a short position of RLJ Lodging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and RLJ Lodging.
Diversification Opportunities for NH Foods and RLJ Lodging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIPMY and RLJ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd 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 NH Foods 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 NH Foods Ltd 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 NH Foods i.e., NH Foods and RLJ Lodging go up and down completely randomly.
Pair Corralation between NH Foods and RLJ Lodging
If you would invest 926.00 in RLJ Lodging Trust on August 31, 2024 and sell it today you would earn a total of 88.00 from holding RLJ Lodging Trust or generate 9.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NH Foods Ltd vs. RLJ Lodging Trust
Performance |
Timeline |
NH Foods |
RLJ Lodging Trust |
NH Foods and RLJ Lodging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NH Foods and RLJ Lodging
The main advantage of trading using opposite NH Foods and RLJ Lodging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods 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.NH Foods vs. The A2 Milk | NH Foods vs. Altavoz Entertainment | NH Foods vs. Artisan Consumer Goods | NH Foods vs. Avi Ltd ADR |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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