Correlation Between Lifeway Foods and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods 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 Lifeway Foods and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Lifeway Foods 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 Lifeway Foods with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Pebblebrook Hotel.
Diversification Opportunities for Lifeway Foods and Pebblebrook Hotel
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lifeway and Pebblebrook is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods i.e., Lifeway Foods and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Lifeway Foods and Pebblebrook Hotel
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the Pebblebrook Hotel. In addition to that, Lifeway Foods is 1.73 times more volatile than Pebblebrook Hotel Trust. It trades about -0.02 of its total potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.2 per unit of volatility. If you would invest 1,140 in Pebblebrook Hotel Trust on August 29, 2024 and sell it today you would earn a total of 160.00 from holding Pebblebrook Hotel Trust or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lifeway Foods vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Lifeway Foods |
| Pebblebrook Hotel Trust |
Lifeway Foods and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Pebblebrook Hotel
The main advantage of trading using opposite Lifeway Foods and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods 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.| Lifeway Foods vs. BE Semiconductor Industries | Lifeway Foods vs. Fast Retailing Co | Lifeway Foods vs. ELMOS SEMICONDUCTOR | Lifeway Foods vs. Carsales |
| Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc |
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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