Diamondrock Hospitality Company (DRH)
DiamondRock Hospitality Company is a self-advising real estate investment trust (REIT) that owns a leading portfolio of geographically diversified hotels concentrated in major entry markets and destination resort locations.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 7.42% per annum.
- DRH price at the close of July 25, 2024 was $8.19 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 20.77% per annum.
- DRH price at the close of July 25, 2024 was lower than the bottom border of the secondary price channel by $0.69 (7.74%). This indicates a possible reversal in the secondary trend direction.
- The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of DRH price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: February 16, 2021
End date: December 6, 2023
a = 2.3953
b = -0.0002
s = 0.0650
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -7.42%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0650) – 1
= 29.67%
February 16, 2021 calculations
Top border of price channel:
Exp(Y392)
= Exp(a + b × X392 + 2 × s)
= Exp(a + b × 571 + 2 × s)
= Exp(2.3953 + -0.0002 × 571 + 2 × 0.0650)
= Exp(2.4046)
= $11.07
Bottom border of price channel:
Exp(Y392)
= Exp(a + b × X392 – 2 × s)
= Exp(a + b × 571 – 2 × s)
= Exp(2.3953 + -0.0002 × 571 – 2 × 0.0650)
= Exp(2.1448)
= $8.54
December 6, 2023 calculations
Top border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 + 2 × s)
= Exp(a + b × 1,594 + 2 × s)
= Exp(2.3953 + -0.0002 × 1,594 + 2 × 0.0650)
= Exp(2.1885)
= $8.92
Bottom border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 – 2 × s)
= Exp(a + b × 1,594 – 2 × s)
= Exp(2.3953 + -0.0002 × 1,594 – 2 × 0.0650)
= Exp(1.9287)
= $6.88
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 7.42% per annum.
- DRH price at the close of July 25, 2024 was $8.19 and was inside the primary price channel.
Secondary Trend
Start date: March 9, 2023
End date: May 1, 2024
a = 1.3321
b = 0.0005
s = 0.0465
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0005) – 1
= 20.77%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0465) – 1
= 20.43%
March 9, 2023 calculations
Top border of price channel:
Exp(Y911)
= Exp(a + b × X911 + 2 × s)
= Exp(a + b × 1,322 + 2 × s)
= Exp(1.3321 + 0.0005 × 1,322 + 2 × 0.0465)
= Exp(2.1087)
= $8.24
Bottom border of price channel:
Exp(Y911)
= Exp(a + b × X911 – 2 × s)
= Exp(a + b × 1,322 – 2 × s)
= Exp(1.3321 + 0.0005 × 1,322 – 2 × 0.0465)
= Exp(1.9228)
= $6.84
May 1, 2024 calculations
Top border of price channel:
Exp(Y1,199)
= Exp(a + b × X1,199 + 2 × s)
= Exp(a + b × 1,741 + 2 × s)
= Exp(1.3321 + 0.0005 × 1,741 + 2 × 0.0465)
= Exp(2.3253)
= $10.23
Bottom border of price channel:
Exp(Y1,199)
= Exp(a + b × X1,199 – 2 × s)
= Exp(a + b × 1,741 – 2 × s)
= Exp(1.3321 + 0.0005 × 1,741 – 2 × 0.0465)
= Exp(2.1395)
= $8.49
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 20.77% per annum.
- DRH price at the close of July 25, 2024 was lower than the bottom border of the secondary price channel by $0.69 (7.74%). This indicates a possible reversal in the secondary trend direction.