Correlation Between Pebblebrook Hotel and Heineken
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Heineken 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 Heineken 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 Heineken NV, you can compare the effects of market volatilities on Pebblebrook Hotel and Heineken 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 Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Heineken.
Diversification Opportunities for Pebblebrook Hotel and Heineken
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pebblebrook and Heineken is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken NV 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 Heineken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken NV has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Heineken go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Heineken
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to under-perform the Heineken. In addition to that, Pebblebrook Hotel is 1.37 times more volatile than Heineken NV. It trades about -0.1 of its total potential returns per unit of risk. Heineken NV is currently generating about -0.07 per unit of volatility. If you would invest 6,730 in Heineken NV on November 7, 2024 and sell it today you would lose (142.00) from holding Heineken NV or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Heineken NV
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Heineken NV |
Pebblebrook Hotel and Heineken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Heineken
The main advantage of trading using opposite Pebblebrook Hotel and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Heineken 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 Heineken will offset losses from the drop in Heineken's long position.| Pebblebrook Hotel vs. PennyMac Mortgage Investment | Pebblebrook Hotel vs. NH HOTEL GROUP | Pebblebrook Hotel vs. Regal Hotels International | Pebblebrook Hotel vs. SLR Investment Corp |
| Heineken vs. COMMERCIAL VEHICLE | Heineken vs. CarsalesCom | Heineken vs. SENECA FOODS A | Heineken vs. Performance Food Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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