Correlation Between GOLD ROAD and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD 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 GOLD ROAD and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on GOLD ROAD 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 GOLD ROAD with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Pebblebrook Hotel.
Diversification Opportunities for GOLD ROAD and Pebblebrook Hotel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GOLD and Pebblebrook is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between GOLD ROAD and Pebblebrook Hotel
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.36 times more return on investment than Pebblebrook Hotel. However, GOLD ROAD is 1.36 times more volatile than Pebblebrook Hotel Trust. It trades about 0.03 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.0 per unit of risk. If you would invest 101.00 in GOLD ROAD RES on September 13, 2024 and sell it today you would earn a total of 27.00 from holding GOLD ROAD RES or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GOLD ROAD RES vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| GOLD ROAD RES |
| Pebblebrook Hotel Trust |
GOLD ROAD and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and Pebblebrook Hotel
The main advantage of trading using opposite GOLD ROAD and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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.The idea behind GOLD ROAD RES and Pebblebrook Hotel Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Pebblebrook Hotel vs. Wayside Technology Group | Pebblebrook Hotel vs. SMA Solar Technology | Pebblebrook Hotel vs. GOLD ROAD RES | Pebblebrook Hotel vs. Computer And Technologies |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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