Correlation Between Host Hotels and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Host Hotels 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 Host Hotels and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Host Hotels 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 Host Hotels with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Pebblebrook Hotel.
Diversification Opportunities for Host Hotels and Pebblebrook Hotel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Host and Pebblebrook is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts 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 Host Hotels 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 Host Hotels Resorts 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 Host Hotels i.e., Host Hotels and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Host Hotels and Pebblebrook Hotel
Considering the 90-day investment horizon Host Hotels Resorts is expected to generate 0.73 times more return on investment than Pebblebrook Hotel. However, Host Hotels Resorts is 1.36 times less risky than Pebblebrook Hotel. 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 1,587 in Host Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 255.00 from holding Host Hotels Resorts or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Host Hotels Resorts |
| Pebblebrook Hotel Trust |
Host Hotels and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Pebblebrook Hotel
The main advantage of trading using opposite Host Hotels and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels 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.| Host Hotels vs. Service Properties Trust | Host Hotels vs. Diamondrock Hospitality | Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. Ryman Hospitality 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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