Correlation Between Hitachi Construction and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction 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 Hitachi Construction and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Construction Machinery and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Hitachi Construction 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 Hitachi Construction with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and Pebblebrook Hotel.
Diversification Opportunities for Hitachi Construction and Pebblebrook Hotel
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hitachi and Pebblebrook is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery 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 Hitachi Construction 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 Hitachi Construction Machinery 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 Hitachi Construction i.e., Hitachi Construction and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Hitachi Construction and Pebblebrook Hotel
Assuming the 90 days horizon Hitachi Construction is expected to generate 8.36 times less return on investment than Pebblebrook Hotel. But when comparing it to its historical volatility, Hitachi Construction Machinery is 1.07 times less risky than Pebblebrook Hotel. It trades about 0.0 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,304 in Pebblebrook Hotel Trust on August 31, 2024 and sell it today you would lose (14.00) from holding Pebblebrook Hotel Trust or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Hitachi Construction |
| Pebblebrook Hotel Trust |
Hitachi Construction and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and Pebblebrook Hotel
The main advantage of trading using opposite Hitachi Construction and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction 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.| Hitachi Construction vs. PARKEN Sport Entertainment | Hitachi Construction vs. FORMPIPE SOFTWARE AB | Hitachi Construction vs. NTG Nordic Transport | Hitachi Construction vs. SPORT LISBOA E |
| Pebblebrook Hotel vs. Live Nation Entertainment | Pebblebrook Hotel vs. Hitachi Construction Machinery | Pebblebrook Hotel vs. PLAYSTUDIOS A DL 0001 | Pebblebrook Hotel vs. Sterling Construction |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |