Correlation Between Pebblebrook Hotel and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Burlington Stores 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 Burlington Stores 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 Burlington Stores, you can compare the effects of market volatilities on Pebblebrook Hotel and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Burlington Stores.
Diversification Opportunities for Pebblebrook Hotel and Burlington Stores
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pebblebrook and Burlington is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Burlington Stores go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Burlington Stores
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 1.14 times more return on investment than Burlington Stores. However, Pebblebrook Hotel is 1.14 times more volatile than Burlington Stores. It trades about -0.45 of its potential returns per unit of risk. Burlington Stores is currently generating about -0.59 per unit of risk. If you would invest 1,330 in Pebblebrook Hotel Trust on November 29, 2024 and sell it today you would lose (230.00) from holding Pebblebrook Hotel Trust or give up 17.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Burlington Stores
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Burlington Stores |
Pebblebrook Hotel and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Burlington Stores
The main advantage of trading using opposite Pebblebrook Hotel and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| Pebblebrook Hotel vs. CANON MARKETING JP | Pebblebrook Hotel vs. H2O Retailing | Pebblebrook Hotel vs. CyberArk Software | Pebblebrook Hotel vs. USU Software AG |
| Burlington Stores vs. Kingdee International Software | Burlington Stores vs. Firan Technology Group | Burlington Stores vs. ASM Pacific Technology | Burlington Stores vs. Computer And Technologies |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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