Correlation Between Pebblebrook Hotel and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and PPHE 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 Pebblebrook Hotel and PPHE HOTEL 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 PPHE HOTEL GROUP, you can compare the effects of market volatilities on Pebblebrook Hotel and PPHE 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 Pebblebrook Hotel with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and PPHE HOTEL.
Diversification Opportunities for Pebblebrook Hotel and PPHE HOTEL
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pebblebrook and PPHE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP 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 PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and PPHE HOTEL go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and PPHE HOTEL
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 0.62 times more return on investment than PPHE HOTEL. However, Pebblebrook Hotel Trust is 1.61 times less risky than PPHE HOTEL. It trades about 0.06 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about -0.18 per unit of risk. If you would invest 1,309 in Pebblebrook Hotel Trust on October 28, 2024 and sell it today you would earn a total of 21.00 from holding Pebblebrook Hotel Trust or generate 1.6% 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. PPHE HOTEL GROUP
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| PPHE HOTEL GROUP |
Pebblebrook Hotel and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and PPHE HOTEL
The main advantage of trading using opposite Pebblebrook Hotel and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, PPHE 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| Pebblebrook Hotel vs. Kingdee International Software | Pebblebrook Hotel vs. New Residential Investment | Pebblebrook Hotel vs. MidCap Financial Investment | Pebblebrook Hotel vs. FANDIFI TECHNOLOGY P |
| PPHE HOTEL vs. Boyd Gaming | PPHE HOTEL vs. CompuGroup Medical SE | PPHE HOTEL vs. Corsair Gaming | PPHE HOTEL vs. PLAYMATES TOYS |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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