Correlation Between Hisense Home and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Hisense Home 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 Hisense Home and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hisense Home Appliances and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Hisense Home 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 Hisense Home with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Pebblebrook Hotel.
Diversification Opportunities for Hisense Home and Pebblebrook Hotel
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hisense and Pebblebrook is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances 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 Hisense Home 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 Hisense Home Appliances 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 Hisense Home i.e., Hisense Home and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Hisense Home and Pebblebrook Hotel
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.43 times more return on investment than Pebblebrook Hotel. However, Hisense Home is 1.43 times more volatile than Pebblebrook Hotel Trust. It trades about 0.13 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.18 per unit of risk. If you would invest 287.00 in Hisense Home Appliances on October 19, 2024 and sell it today you would earn a total of 43.00 from holding Hisense Home Appliances or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Hisense Home Appliances |
| Pebblebrook Hotel Trust |
Hisense Home and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Pebblebrook Hotel
The main advantage of trading using opposite Hisense Home and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home 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.| Hisense Home vs. Fortune Brands Home | Hisense Home vs. Whirlpool | Hisense Home vs. Tempur Sealy International | Hisense Home vs. Howden Joinery Group |
| Pebblebrook Hotel vs. Amkor Technology | Pebblebrook Hotel vs. THORNEY TECHS LTD | Pebblebrook Hotel vs. Easy Software AG | Pebblebrook Hotel vs. Hisense Home Appliances |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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