Correlation Between Pebblebrook Hotel and KB HOME
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and KB HOME 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 KB HOME 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 KB HOME, you can compare the effects of market volatilities on Pebblebrook Hotel and KB HOME 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 KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and KB HOME.
Diversification Opportunities for Pebblebrook Hotel and KB HOME
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pebblebrook and KBH is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME 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 KB HOME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB HOME has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and KB HOME go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and KB HOME
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 1.99 times more return on investment than KB HOME. However, Pebblebrook Hotel is 1.99 times more volatile than KB HOME. It trades about 0.2 of its potential returns per unit of risk. KB HOME is currently generating about 0.24 per unit of risk. If you would invest 1,140 in Pebblebrook Hotel Trust on August 31, 2024 and sell it today you would earn a total of 150.00 from holding Pebblebrook Hotel Trust or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. KB HOME
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| KB HOME |
Pebblebrook Hotel and KB HOME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and KB HOME
The main advantage of trading using opposite Pebblebrook Hotel and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, KB HOME 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 KB HOME will offset losses from the drop in KB HOME's long position.| Pebblebrook Hotel vs. Live Nation Entertainment | Pebblebrook Hotel vs. Hitachi Construction Machinery | Pebblebrook Hotel vs. PLAYSTUDIOS A DL 0001 | Pebblebrook Hotel vs. Sterling Construction |
| KB HOME vs. ASURE SOFTWARE | KB HOME vs. BJs Wholesale Club | KB HOME vs. NXP Semiconductors NV | KB HOME vs. JIAHUA STORES |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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