Correlation Between Ryman Hospitality and Sotherly Hotels

Can any of the company-specific risk be diversified away by investing in both Ryman Hospitality and Sotherly Hotels 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 Ryman Hospitality and Sotherly Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ryman Hospitality Properties and Sotherly Hotels Series, you can compare the effects of market volatilities on Ryman Hospitality and Sotherly Hotels 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 Ryman Hospitality with a short position of Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryman Hospitality and Sotherly Hotels.

Diversification Opportunities for Ryman Hospitality and Sotherly Hotels

-0.29

Correlation Coefficient

Ryman Hospitality  Sotherly Hotels

Very good diversification

The 3 months correlation between Ryman and Sotherly is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Hospitality Properties and Sotherly Hotels Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels Series and Ryman Hospitality 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 Ryman Hospitality Properties are associated (or correlated) with Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels Series has no effect on the direction of Ryman Hospitality i.e., Ryman Hospitality and Sotherly Hotels go up and down completely randomly.

Pair Corralation between Ryman Hospitality and Sotherly Hotels

Considering the 90-day investment horizon Ryman Hospitality Properties is expected to under-perform the Sotherly Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Ryman Hospitality Properties is 1.19 times less risky than Sotherly Hotels. The stock trades about -0.11 of its potential returns per unit of risk. The Sotherly Hotels Series is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,586  in Sotherly Hotels Series on December 28, 2024 and sell it today you would earn a total of  92.00  from holding Sotherly Hotels Series or generate 5.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ryman Hospitality Properties  vs.  Sotherly Hotels Series

Ryman Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ryman Hospitality Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest sluggish performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Sotherly Hotels Series

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sotherly Hotels Series are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sotherly Hotels may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ryman Hospitality and Sotherly Hotels

The main advantage of trading using opposite Ryman Hospitality and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryman Hospitality position performs unexpectedly, Sotherly Hotels 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 Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.

The idea behind Ryman Hospitality Properties and Sotherly Hotels Series pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.