Correlation Between Kaiser Aluminum and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum 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 Kaiser Aluminum and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Kaiser Aluminum 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 Kaiser Aluminum with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Pebblebrook Hotel.
Diversification Opportunities for Kaiser Aluminum and Pebblebrook Hotel
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kaiser and Pebblebrook is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum i.e., Kaiser Aluminum and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Pebblebrook Hotel
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 272.0 times less return on investment than Pebblebrook Hotel. In addition to that, Kaiser Aluminum is 1.14 times more volatile than Pebblebrook Hotel Trust. It trades about 0.0 of its total potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.04 per unit of volatility. If you would invest 1,238 in Pebblebrook Hotel Trust on October 26, 2024 and sell it today you would earn a total of 92.00 from holding Pebblebrook Hotel Trust or generate 7.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kaiser Aluminum vs. Pebblebrook Hotel Trust
Performance |
Timeline |
Kaiser Aluminum |
Pebblebrook Hotel Trust |
Kaiser Aluminum and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kaiser Aluminum and Pebblebrook Hotel
The main advantage of trading using opposite Kaiser Aluminum and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum 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.Kaiser Aluminum vs. SOGECLAIR SA INH | Kaiser Aluminum vs. Pentair plc | Kaiser Aluminum vs. Meta Financial Group | Kaiser Aluminum vs. UNIQA INSURANCE GR |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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