Correlation Between Pebblebrook Hotel and Walmart
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Pebblebrook Hotel and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Walmart.
Diversification Opportunities for Pebblebrook Hotel and Walmart
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pebblebrook and Walmart is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Walmart go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Walmart
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to under-perform the Walmart. In addition to that, Pebblebrook Hotel is 1.89 times more volatile than Walmart. It trades about 0.0 of its total potential returns per unit of risk. Walmart is currently generating about 0.14 per unit of volatility. If you would invest 4,231 in Walmart on October 25, 2024 and sell it today you would earn a total of 4,702 from holding Walmart or generate 111.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Walmart
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Walmart |
Pebblebrook Hotel and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Walmart
The main advantage of trading using opposite Pebblebrook Hotel and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Pebblebrook Hotel vs. Cars Inc | Pebblebrook Hotel vs. United Natural Foods | Pebblebrook Hotel vs. Motorcar Parts of | Pebblebrook Hotel vs. Cal Maine Foods |
| Walmart vs. CDL INVESTMENT | Walmart vs. Guangdong Investment Limited | Walmart vs. New Residential Investment | Walmart vs. Columbia Sportswear |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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