Correlation Between Pebblebrook Hotel and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Geratherm 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 Geratherm 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 Geratherm Medical AG, you can compare the effects of market volatilities on Pebblebrook Hotel and Geratherm 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 Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Geratherm Medical.
Diversification Opportunities for Pebblebrook Hotel and Geratherm Medical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pebblebrook and Geratherm is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm 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 Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Geratherm Medical go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Geratherm Medical
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 0.91 times more return on investment than Geratherm Medical. However, Pebblebrook Hotel Trust is 1.1 times less risky than Geratherm Medical. It trades about 0.2 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about -0.11 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 | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Geratherm Medical AG
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Geratherm Medical |
Pebblebrook Hotel and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Geratherm Medical
The main advantage of trading using opposite Pebblebrook Hotel and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Geratherm 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 Geratherm Medical will offset losses from the drop in Geratherm Medical's long position.| Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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