Correlation Between KLA Tencor and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both KLA Tencor 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 KLA Tencor and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on KLA Tencor 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 KLA Tencor with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Pebblebrook Hotel.
Diversification Opportunities for KLA Tencor and Pebblebrook Hotel
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KLA and Pebblebrook is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor 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 KLA Tencor 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 KLA Tencor 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 KLA Tencor i.e., KLA Tencor and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between KLA Tencor and Pebblebrook Hotel
Given the investment horizon of 90 days KLA Tencor is expected to generate 2.39 times more return on investment than Pebblebrook Hotel. However, KLA Tencor is 2.39 times more volatile than Pebblebrook Hotel Trust. It trades about 0.03 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 57,302 in KLA Tencor on September 14, 2024 and sell it today you would earn a total of 8,111 from holding KLA Tencor or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.17% |
| Values | Daily Returns |
KLA Tencor vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| KLA Tencor |
| Pebblebrook Hotel Trust |
KLA Tencor and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Pebblebrook Hotel
The main advantage of trading using opposite KLA Tencor and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor 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.| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
| Pebblebrook Hotel vs. Celsius Holdings | Pebblebrook Hotel vs. Ispire Technology Common | Pebblebrook Hotel vs. Vita Coco | Pebblebrook Hotel vs. Anheuser Busch Inbev |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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