Correlation Between International Consolidated and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Pebblebrook Hotel.
Diversification Opportunities for International Consolidated and Pebblebrook Hotel
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Pebblebrook is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air 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 International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between International Consolidated and Pebblebrook Hotel
Assuming the 90 days horizon International Consolidated Airlines is expected to generate 1.28 times more return on investment than Pebblebrook Hotel. However, International Consolidated is 1.28 times more volatile than Pebblebrook Hotel Trust. It trades about 0.22 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.04 per unit of risk. If you would invest 363.00 in International Consolidated Airlines on November 4, 2024 and sell it today you would earn a total of 36.00 from holding International Consolidated Airlines or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| International Consolidated |
| Pebblebrook Hotel Trust |
International Consolidated and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Pebblebrook Hotel
The main advantage of trading using opposite International Consolidated and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. Fortescue Metals Group | International Consolidated vs. Easy Software AG | International Consolidated vs. USU Software AG | International Consolidated vs. GREENX METALS LTD |
| Pebblebrook Hotel vs. SIVERS SEMICONDUCTORS AB | Pebblebrook Hotel vs. NorAm Drilling AS | Pebblebrook Hotel vs. Volkswagen AG | Pebblebrook Hotel vs. Darden Restaurants |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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