Correlation Between Pebblebrook Hotel and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Pebblebrook Hotel and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and DFS Furniture.
Diversification Opportunities for Pebblebrook Hotel and DFS Furniture
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pebblebrook and DFS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and DFS Furniture go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and DFS Furniture
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 0.71 times more return on investment than DFS Furniture. However, Pebblebrook Hotel Trust is 1.41 times less risky than DFS Furniture. It trades about -0.15 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about -0.15 per unit of risk. If you would invest 1,359 in Pebblebrook Hotel Trust on October 16, 2024 and sell it today you would lose (79.00) from holding Pebblebrook Hotel Trust or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. DFS Furniture PLC
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| DFS Furniture PLC |
Pebblebrook Hotel and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and DFS Furniture
The main advantage of trading using opposite Pebblebrook Hotel and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Pebblebrook Hotel vs. Elmos Semiconductor SE | Pebblebrook Hotel vs. BE Semiconductor Industries | Pebblebrook Hotel vs. KINGBOARD CHEMICAL | Pebblebrook Hotel vs. Siamgas And Petrochemicals |
| DFS Furniture vs. Japan Tobacco | DFS Furniture vs. Siamgas And Petrochemicals | DFS Furniture vs. The Yokohama Rubber | DFS Furniture vs. SOLSTAD OFFSHORE NK |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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