Correlation Between Pebblebrook Hotel and Compugroup Medical
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Compugroup Medical 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 Compugroup Medical 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 Compugroup Medical SE, you can compare the effects of market volatilities on Pebblebrook Hotel and Compugroup Medical 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 Compugroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Compugroup Medical.
Diversification Opportunities for Pebblebrook Hotel and Compugroup Medical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pebblebrook and Compugroup is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical 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 Compugroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugroup Medical has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Compugroup Medical go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Compugroup Medical
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 1.32 times more return on investment than Compugroup Medical. However, Pebblebrook Hotel is 1.32 times more volatile than Compugroup Medical SE. It trades about 0.2 of its potential returns per unit of risk. Compugroup Medical SE is currently generating about -0.01 per unit of risk. If you would invest 1,140 in Pebblebrook Hotel Trust on August 28, 2024 and sell it today you would earn a total of 160.00 from holding Pebblebrook Hotel Trust or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Compugroup Medical SE
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Compugroup Medical |
Pebblebrook Hotel and Compugroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Compugroup Medical
The main advantage of trading using opposite Pebblebrook Hotel and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Compugroup Medical 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 Compugroup Medical will offset losses from the drop in Compugroup Medical's long position.| Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc |
| Compugroup Medical vs. PTT Global Chemical | Compugroup Medical vs. NIPPON STEEL SPADR | Compugroup Medical vs. COSMOSTEEL HLDGS | Compugroup Medical vs. Khiron Life Sciences |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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