Correlation Between Live Nation and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Live Nation 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 Live Nation and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Nation Entertainment and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Live Nation 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 Live Nation with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Pebblebrook Hotel.
Diversification Opportunities for Live Nation and Pebblebrook Hotel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Pebblebrook is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment 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 Live Nation 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 Live Nation Entertainment 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 Live Nation i.e., Live Nation and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Live Nation and Pebblebrook Hotel
Assuming the 90 days horizon Live Nation Entertainment is expected to generate 0.99 times more return on investment than Pebblebrook Hotel. However, Live Nation Entertainment is 1.01 times less risky than Pebblebrook Hotel. It trades about 0.35 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.28 per unit of risk. If you would invest 10,725 in Live Nation Entertainment on September 2, 2024 and sell it today you would earn a total of 2,460 from holding Live Nation Entertainment or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Live Nation Entertainment |
| Pebblebrook Hotel Trust |
Live Nation and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Pebblebrook Hotel
The main advantage of trading using opposite Live Nation and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation 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.| Live Nation vs. Rai Way SpA | Live Nation vs. Superior Plus Corp | Live Nation vs. NMI Holdings | Live Nation vs. Origin Agritech |
| Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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