Correlation Between SIERRA METALS and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both SIERRA METALS 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 SIERRA METALS and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIERRA METALS and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on SIERRA METALS 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 SIERRA METALS with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIERRA METALS and Pebblebrook Hotel.
Diversification Opportunities for SIERRA METALS and Pebblebrook Hotel
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between SIERRA and Pebblebrook is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SIERRA METALS 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 SIERRA METALS 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 SIERRA METALS 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 SIERRA METALS i.e., SIERRA METALS and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between SIERRA METALS and Pebblebrook Hotel
Assuming the 90 days trading horizon SIERRA METALS is expected to generate 1.5 times more return on investment than Pebblebrook Hotel. However, SIERRA METALS is 1.5 times more volatile than Pebblebrook Hotel Trust. It trades about 0.07 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.04 per unit of risk. If you would invest 47.00 in SIERRA METALS on October 26, 2024 and sell it today you would earn a total of 11.00 from holding SIERRA METALS or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIERRA METALS vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| SIERRA METALS |
| Pebblebrook Hotel Trust |
SIERRA METALS and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIERRA METALS and Pebblebrook Hotel
The main advantage of trading using opposite SIERRA METALS and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIERRA METALS 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.| SIERRA METALS vs. Park Hotels Resorts | SIERRA METALS vs. MELIA HOTELS | SIERRA METALS vs. Hyatt Hotels | SIERRA METALS vs. Taiwan Semiconductor Manufacturing |
| Pebblebrook Hotel vs. DISTRICT METALS | Pebblebrook Hotel vs. ADRIATIC METALS LS 013355 | Pebblebrook Hotel vs. SIERRA METALS | Pebblebrook Hotel vs. Kaiser Aluminum |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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