Correlation Between Pebblebrook Hotel and Imperial Brands
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Imperial Brands 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 Imperial Brands 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 Imperial Brands PLC, you can compare the effects of market volatilities on Pebblebrook Hotel and Imperial Brands 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 Imperial Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Imperial Brands.
Diversification Opportunities for Pebblebrook Hotel and Imperial Brands
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pebblebrook and Imperial is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Imperial Brands PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Brands 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 Imperial Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Brands PLC has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Imperial Brands go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Imperial Brands
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 2.28 times more return on investment than Imperial Brands. However, Pebblebrook Hotel is 2.28 times more volatile than Imperial Brands PLC. It trades about 0.35 of its potential returns per unit of risk. Imperial Brands PLC is currently generating about 0.39 per unit of risk. If you would invest 1,090 in Pebblebrook Hotel Trust on September 5, 2024 and sell it today you would earn a total of 270.00 from holding Pebblebrook Hotel Trust or generate 24.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Imperial Brands PLC
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Imperial Brands PLC |
Pebblebrook Hotel and Imperial Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Imperial Brands
The main advantage of trading using opposite Pebblebrook Hotel and Imperial Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Imperial Brands 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 Imperial Brands will offset losses from the drop in Imperial Brands' long position.| Pebblebrook Hotel vs. AECOM TECHNOLOGY | Pebblebrook Hotel vs. Check Point Software | Pebblebrook Hotel vs. Salesforce | Pebblebrook Hotel vs. Lamar Advertising |
| Imperial Brands vs. INTERCONT HOTELS | Imperial Brands vs. Charter Communications | Imperial Brands vs. Pebblebrook Hotel Trust | Imperial Brands vs. SBA Communications Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |