Correlation Between HYATT HOTELS and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both HYATT HOTELS and Pebblebrook Hotel 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 HYATT HOTELS and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYATT HOTELS A and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on HYATT HOTELS and Pebblebrook Hotel 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 HYATT HOTELS with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYATT HOTELS and Pebblebrook Hotel.
Diversification Opportunities for HYATT HOTELS and Pebblebrook Hotel
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HYATT and Pebblebrook is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding HYATT HOTELS A and Pebblebrook Hotel Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pebblebrook Hotel Trust and HYATT HOTELS 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 HYATT HOTELS A are associated (or correlated) with Pebblebrook Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pebblebrook Hotel Trust has no effect on the direction of HYATT HOTELS i.e., HYATT HOTELS and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between HYATT HOTELS and Pebblebrook Hotel
Assuming the 90 days trading horizon HYATT HOTELS A is expected to under-perform the Pebblebrook Hotel. But the stock apears to be less risky and, when comparing its historical volatility, HYATT HOTELS A is 1.4 times less risky than Pebblebrook Hotel. The stock trades about -0.15 of its potential returns per unit of risk. The Pebblebrook Hotel Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,309 in Pebblebrook Hotel Trust on October 28, 2024 and sell it today you would earn a total of 21.00 from holding Pebblebrook Hotel Trust or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYATT HOTELS A vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| HYATT HOTELS A |
| Pebblebrook Hotel Trust |
HYATT HOTELS and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYATT HOTELS and Pebblebrook Hotel
The main advantage of trading using opposite HYATT HOTELS and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYATT HOTELS position performs unexpectedly, Pebblebrook Hotel 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 Pebblebrook Hotel will offset losses from the drop in Pebblebrook Hotel's long position.| HYATT HOTELS vs. Insurance Australia Group | HYATT HOTELS vs. DeVry Education Group | HYATT HOTELS vs. Xinhua Winshare Publishing | HYATT HOTELS vs. HANOVER INSURANCE |
| Pebblebrook Hotel vs. Kingdee International Software | Pebblebrook Hotel vs. New Residential Investment | Pebblebrook Hotel vs. MidCap Financial Investment | Pebblebrook Hotel vs. FANDIFI TECHNOLOGY P |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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