Correlation Between Pebblebrook Hotel and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and LG Electronics 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 LG Electronics 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 LG Electronics, you can compare the effects of market volatilities on Pebblebrook Hotel and LG Electronics 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 LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and LG Electronics.
Diversification Opportunities for Pebblebrook Hotel and LG Electronics
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pebblebrook and LGLG is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics 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 LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and LG Electronics go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and LG Electronics
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 0.99 times more return on investment than LG Electronics. However, Pebblebrook Hotel Trust is 1.01 times less risky than LG Electronics. It trades about 0.01 of its potential returns per unit of risk. LG Electronics is currently generating about -0.01 per unit of risk. If you would invest 1,351 in Pebblebrook Hotel Trust on October 15, 2024 and sell it today you would lose (81.00) from holding Pebblebrook Hotel Trust or give up 6.0% 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. LG Electronics
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| LG Electronics |
Pebblebrook Hotel and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and LG Electronics
The main advantage of trading using opposite Pebblebrook Hotel and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, LG Electronics 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| Pebblebrook Hotel vs. SALESFORCE INC CDR | Pebblebrook Hotel vs. Xinhua Winshare Publishing | Pebblebrook Hotel vs. Adtalem Global Education | Pebblebrook Hotel vs. CODERE ONLINE LUX |
| LG Electronics vs. UNIQA INSURANCE GR | LG Electronics vs. Ameriprise Financial | LG Electronics vs. Media and Games | LG Electronics vs. CVB Financial 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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