Correlation Between Highwoods Properties and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Highwoods Properties 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 Highwoods Properties and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwoods Properties and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Highwoods Properties 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 Highwoods Properties with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwoods Properties and Pebblebrook Hotel.
Diversification Opportunities for Highwoods Properties and Pebblebrook Hotel
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highwoods and Pebblebrook is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties i.e., Highwoods Properties and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Highwoods Properties and Pebblebrook Hotel
Considering the 90-day investment horizon Highwoods Properties is expected to generate 0.87 times more return on investment than Pebblebrook Hotel. However, Highwoods Properties is 1.14 times less risky than Pebblebrook Hotel. It trades about 0.08 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.02 per unit of risk. If you would invest 2,102 in Highwoods Properties on November 9, 2024 and sell it today you would earn a total of 825.00 from holding Highwoods Properties or generate 39.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwoods Properties vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Highwoods Properties |
| Pebblebrook Hotel Trust |
Highwoods Properties and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwoods Properties and Pebblebrook Hotel
The main advantage of trading using opposite Highwoods Properties and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwoods Properties 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.| Highwoods Properties vs. Piedmont Office Realty | Highwoods Properties vs. Douglas Emmett | Highwoods Properties vs. Kilroy Realty Corp | Highwoods Properties vs. Hudson Pacific Properties |
| Pebblebrook Hotel vs. RLJ Lodging Trust | Pebblebrook Hotel vs. Sunstone Hotel Investors | Pebblebrook Hotel vs. Diamondrock Hospitality | Pebblebrook Hotel vs. Summit Hotel Properties |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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