Correlation Between Pebblebrook Hotel and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and CDN IMPERIAL 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 CDN IMPERIAL 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 CDN IMPERIAL BANK, you can compare the effects of market volatilities on Pebblebrook Hotel and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and CDN IMPERIAL.
Diversification Opportunities for Pebblebrook Hotel and CDN IMPERIAL
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pebblebrook and CDN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and CDN IMPERIAL
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 3.47 times more return on investment than CDN IMPERIAL. However, Pebblebrook Hotel is 3.47 times more volatile than CDN IMPERIAL BANK. It trades about 0.28 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.28 per unit of risk. If you would invest 1,090 in Pebblebrook Hotel Trust on September 4, 2024 and sell it today you would earn a total of 190.00 from holding Pebblebrook Hotel Trust or generate 17.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| CDN IMPERIAL BANK |
Pebblebrook Hotel and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and CDN IMPERIAL
The main advantage of trading using opposite Pebblebrook Hotel and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| Pebblebrook Hotel vs. CDN IMPERIAL BANK | Pebblebrook Hotel vs. QBE Insurance Group | Pebblebrook Hotel vs. Tower Semiconductor | Pebblebrook Hotel vs. PT Bank Maybank |
| CDN IMPERIAL vs. TOTAL GABON | CDN IMPERIAL vs. Walgreens Boots Alliance | CDN IMPERIAL vs. Peak Resources Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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