Correlation Between Pebblebrook Hotel and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Playtech Plc 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 Playtech Plc 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 Playtech plc, you can compare the effects of market volatilities on Pebblebrook Hotel and Playtech Plc 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 Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Playtech Plc.
Diversification Opportunities for Pebblebrook Hotel and Playtech Plc
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pebblebrook and Playtech is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech 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 Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech plc has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Playtech Plc go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Playtech Plc
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 1.93 times more return on investment than Playtech Plc. However, Pebblebrook Hotel is 1.93 times more volatile than Playtech plc. It trades about 0.05 of its potential returns per unit of risk. Playtech plc is currently generating about 0.04 per unit of risk. If you would invest 1,209 in Pebblebrook Hotel Trust on November 6, 2024 and sell it today you would earn a total of 51.00 from holding Pebblebrook Hotel Trust or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Playtech plc
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Playtech plc |
Pebblebrook Hotel and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Playtech Plc
The main advantage of trading using opposite Pebblebrook Hotel and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Playtech Plc 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 Playtech Plc will offset losses from the drop in Playtech Plc'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 |
| Playtech Plc vs. National Beverage Corp | Playtech Plc vs. Thai Beverage Public | Playtech Plc vs. Media and Games | Playtech Plc vs. THAI BEVERAGE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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