Correlation Between Pebblebrook Hotel and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Addtech AB 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 Addtech AB 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 Addtech AB, you can compare the effects of market volatilities on Pebblebrook Hotel and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Addtech AB.
Diversification Opportunities for Pebblebrook Hotel and Addtech AB
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pebblebrook and Addtech is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Addtech AB go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Addtech AB
Assuming the 90 days trading horizon Pebblebrook Hotel is expected to generate 74.5 times less return on investment than Addtech AB. But when comparing it to its historical volatility, Pebblebrook Hotel Trust is 1.13 times less risky than Addtech AB. It trades about 0.0 of its potential returns per unit of risk. Addtech AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,812 in Addtech AB on October 29, 2024 and sell it today you would earn a total of 952.00 from holding Addtech AB or generate 52.54% 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. Addtech AB
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Addtech AB |
Pebblebrook Hotel and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Addtech AB
The main advantage of trading using opposite Pebblebrook Hotel and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB'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 |
| Addtech AB vs. ALEFARM BREWING DK 05 | Addtech AB vs. Sumitomo Mitsui Construction | Addtech AB vs. Tencent Music Entertainment | Addtech AB vs. Australian Agricultural |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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