Correlation Between Pebblebrook Hotel and HYATT HOTELS-A
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and HYATT HOTELS-A 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 Pebblebrook Hotel and HYATT HOTELS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pebblebrook Hotel Trust and HYATT HOTELS A, you can compare the effects of market volatilities on Pebblebrook Hotel and HYATT HOTELS-A 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 Pebblebrook Hotel with a short position of HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and HYATT HOTELS-A.
Diversification Opportunities for Pebblebrook Hotel and HYATT HOTELS-A
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pebblebrook and HYATT is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and Pebblebrook Hotel 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 Pebblebrook Hotel Trust are associated (or correlated) with HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and HYATT HOTELS-A go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and HYATT HOTELS-A
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 1.31 times more return on investment than HYATT HOTELS-A. However, Pebblebrook Hotel is 1.31 times more volatile than HYATT HOTELS A. It trades about 0.19 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.13 per unit of risk. If you would invest 1,140 in Pebblebrook Hotel Trust on August 28, 2024 and sell it today you would earn a total of 150.00 from holding Pebblebrook Hotel Trust or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. HYATT HOTELS A
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| HYATT HOTELS A |
Pebblebrook Hotel and HYATT HOTELS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and HYATT HOTELS-A
The main advantage of trading using opposite Pebblebrook Hotel and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.| Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc |
| HYATT HOTELS-A vs. Cogent Communications Holdings | HYATT HOTELS-A vs. SK TELECOM TDADR | HYATT HOTELS-A vs. AM EAGLE OUTFITTERS | HYATT HOTELS-A vs. Major Drilling Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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