Correlation Between GRUPO CARSO and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO 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 GRUPO CARSO and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPO CARSO A1 and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on GRUPO CARSO 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 GRUPO CARSO with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO and Pebblebrook Hotel.
Diversification Opportunities for GRUPO CARSO and Pebblebrook Hotel
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between GRUPO and Pebblebrook is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 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 GRUPO CARSO 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 GRUPO CARSO A1 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 GRUPO CARSO i.e., GRUPO CARSO and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between GRUPO CARSO and Pebblebrook Hotel
Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 1.3 times more return on investment than Pebblebrook Hotel. However, GRUPO CARSO is 1.3 times more volatile than Pebblebrook Hotel Trust. It trades about 0.29 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.16 per unit of risk. If you would invest 515.00 in GRUPO CARSO A1 on October 29, 2024 and sell it today you would earn a total of 50.00 from holding GRUPO CARSO A1 or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPO CARSO A1 vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| GRUPO CARSO A1 |
| Pebblebrook Hotel Trust |
GRUPO CARSO and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPO CARSO and Pebblebrook Hotel
The main advantage of trading using opposite GRUPO CARSO and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO 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.| GRUPO CARSO vs. Motorcar Parts of | GRUPO CARSO vs. Citic Telecom International | GRUPO CARSO vs. Grupo Carso SAB | GRUPO CARSO vs. China Communications Services |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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