Correlation Between Rithm Capital and Diamondrock Hospitality
Can any of the company-specific risk be diversified away by investing in both Rithm Capital and Diamondrock Hospitality 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 Rithm Capital and Diamondrock Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rithm Capital Corp and Diamondrock Hospitality, you can compare the effects of market volatilities on Rithm Capital and Diamondrock Hospitality 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 Rithm Capital with a short position of Diamondrock Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and Diamondrock Hospitality.
Diversification Opportunities for Rithm Capital and Diamondrock Hospitality
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rithm and Diamondrock is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and Diamondrock Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamondrock Hospitality and Rithm Capital 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 Rithm Capital Corp are associated (or correlated) with Diamondrock Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamondrock Hospitality has no effect on the direction of Rithm Capital i.e., Rithm Capital and Diamondrock Hospitality go up and down completely randomly.
Pair Corralation between Rithm Capital and Diamondrock Hospitality
Given the investment horizon of 90 days Rithm Capital Corp is expected to under-perform the Diamondrock Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, Rithm Capital Corp is 1.57 times less risky than Diamondrock Hospitality. The stock trades about -0.14 of its potential returns per unit of risk. The Diamondrock Hospitality is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 831.00 in Diamondrock Hospitality on August 25, 2025 and sell it today you would earn a total of 51.00 from holding Diamondrock Hospitality or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rithm Capital Corp vs. Diamondrock Hospitality
Performance |
| Timeline |
| Rithm Capital Corp |
| Diamondrock Hospitality |
Rithm Capital and Diamondrock Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and Diamondrock Hospitality
The main advantage of trading using opposite Rithm Capital and Diamondrock Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital position performs unexpectedly, Diamondrock Hospitality 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 Diamondrock Hospitality will offset losses from the drop in Diamondrock Hospitality's long position.| Rithm Capital vs. Essential Properties Realty | Rithm Capital vs. Arbor Realty Trust | Rithm Capital vs. Starwood Property Trust | Rithm Capital vs. Brookfield Property Partners |
| Diamondrock Hospitality vs. Sunstone Hotel Investors | Diamondrock Hospitality vs. Xenia Hotels Resorts | Diamondrock Hospitality vs. LTC Properties | Diamondrock Hospitality vs. Dynex Capital |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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