Correlation Between Pebblebrook Hotel and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Aegon NV 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 Aegon NV 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 Aegon NV ADR, you can compare the effects of market volatilities on Pebblebrook Hotel and Aegon NV 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 Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Aegon NV.
Diversification Opportunities for Pebblebrook Hotel and Aegon NV
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pebblebrook and Aegon is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR 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 Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Aegon NV go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Aegon NV
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 0.6 times more return on investment than Aegon NV. However, Pebblebrook Hotel Trust is 1.66 times less risky than Aegon NV. It trades about -0.08 of its potential returns per unit of risk. Aegon NV ADR is currently generating about -0.09 per unit of risk. If you would invest 2,233 in Pebblebrook Hotel Trust on September 12, 2024 and sell it today you would lose (33.00) from holding Pebblebrook Hotel Trust or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Aegon NV ADR
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Aegon NV ADR |
Pebblebrook Hotel and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Aegon NV
The main advantage of trading using opposite Pebblebrook Hotel and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Aegon NV 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 Aegon NV will offset losses from the drop in Aegon NV's long position.| Pebblebrook Hotel vs. Legacy Education | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. NVIDIA | Pebblebrook Hotel vs. Microsoft |
| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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