Correlation Between Pebblebrook Hotel and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and DALATA HOTEL 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 DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on Pebblebrook Hotel and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and DALATA HOTEL.
Diversification Opportunities for Pebblebrook Hotel and DALATA HOTEL
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pebblebrook and DALATA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and DALATA HOTEL go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and DALATA HOTEL
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to under-perform the DALATA HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, Pebblebrook Hotel Trust is 1.74 times less risky than DALATA HOTEL. The stock trades about 0.0 of its potential returns per unit of risk. The DALATA HOTEL is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 426.00 in DALATA HOTEL on November 1, 2024 and sell it today you would earn a total of 11.00 from holding DALATA HOTEL or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. DALATA HOTEL
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| DALATA HOTEL |
Pebblebrook Hotel and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and DALATA HOTEL
The main advantage of trading using opposite Pebblebrook Hotel and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.| Pebblebrook Hotel vs. Advanced Medical Solutions | Pebblebrook Hotel vs. VIENNA INSURANCE GR | Pebblebrook Hotel vs. MeVis Medical Solutions | Pebblebrook Hotel vs. Peijia Medical Limited |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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