Correlation Between Kingdee International and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Kingdee International 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 Kingdee International and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingdee International Software and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Kingdee International 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 Kingdee International with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Pebblebrook Hotel.
Diversification Opportunities for Kingdee International and Pebblebrook Hotel
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and Pebblebrook is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software 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 Kingdee International 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 Kingdee International Software 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 Kingdee International i.e., Kingdee International and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Kingdee International and Pebblebrook Hotel
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.23 times more return on investment than Pebblebrook Hotel. However, Kingdee International is 2.23 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 0.07 per unit of risk. If you would invest 63.00 in Kingdee International Software on October 18, 2024 and sell it today you would earn a total of 36.00 from holding Kingdee International Software or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Kingdee International |
| Pebblebrook Hotel Trust |
Kingdee International and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Pebblebrook Hotel
The main advantage of trading using opposite Kingdee International and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International 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.| Kingdee International vs. Keck Seng Investments | Kingdee International vs. Apollo Investment Corp | Kingdee International vs. ALERION CLEANPOWER | Kingdee International vs. Luckin Coffee |
| Pebblebrook Hotel vs. Meiko Electronics Co | Pebblebrook Hotel vs. Kingdee International Software | Pebblebrook Hotel vs. AXWAY SOFTWARE EO | Pebblebrook Hotel vs. Axway Software SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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