Correlation Between Pebblebrook Hotel and Gaming
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Gaming 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 Gaming 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 Gaming and Leisure, you can compare the effects of market volatilities on Pebblebrook Hotel and Gaming 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 Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Gaming.
Diversification Opportunities for Pebblebrook Hotel and Gaming
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pebblebrook and Gaming is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure 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 Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Gaming go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Gaming
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 1.26 times more return on investment than Gaming. However, Pebblebrook Hotel is 1.26 times more volatile than Gaming and Leisure. It trades about 0.05 of its potential returns per unit of risk. Gaming and Leisure is currently generating about -0.01 per unit of risk. If you would invest 1,209 in Pebblebrook Hotel Trust on November 6, 2024 and sell it today you would earn a total of 51.00 from holding Pebblebrook Hotel Trust or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Gaming and Leisure
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Gaming and Leisure |
Pebblebrook Hotel and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Gaming
The main advantage of trading using opposite Pebblebrook Hotel and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| Pebblebrook Hotel vs. PennyMac Mortgage Investment | Pebblebrook Hotel vs. NH HOTEL GROUP | Pebblebrook Hotel vs. Regal Hotels International | Pebblebrook Hotel vs. SLR Investment Corp |
| Gaming vs. Columbia Sportswear | Gaming vs. G III APPAREL GROUP | Gaming vs. URBAN OUTFITTERS | Gaming vs. BRAEMAR HOTELS RES |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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