Correlation Between Pebblebrook Hotel and Clipper Realty
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Clipper Realty 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 Clipper Realty 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 Clipper Realty, you can compare the effects of market volatilities on Pebblebrook Hotel and Clipper Realty 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 Clipper Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Clipper Realty.
Diversification Opportunities for Pebblebrook Hotel and Clipper Realty
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pebblebrook and Clipper is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Clipper Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Realty 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 Clipper Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Realty has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Clipper Realty go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Clipper Realty
Considering the 90-day investment horizon Pebblebrook Hotel Trust is expected to generate 0.25 times more return on investment than Clipper Realty. However, Pebblebrook Hotel Trust is 4.02 times less risky than Clipper Realty. It trades about 0.03 of its potential returns per unit of risk. Clipper Realty is currently generating about -0.04 per unit of risk. If you would invest 1,372 in Pebblebrook Hotel Trust on October 26, 2024 and sell it today you would earn a total of 20.00 from holding Pebblebrook Hotel Trust or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pebblebrook Hotel Trust vs. Clipper Realty
Performance |
| Timeline |
| Pebblebrook Hotel Trust |
| Clipper Realty |
Pebblebrook Hotel and Clipper Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pebblebrook Hotel and Clipper Realty
The main advantage of trading using opposite Pebblebrook Hotel and Clipper Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Clipper Realty 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 Clipper Realty will offset losses from the drop in Clipper Realty's long position.| Pebblebrook Hotel vs. Park Hotels Resorts | Pebblebrook Hotel vs. Diamondrock Hospitality | Pebblebrook Hotel vs. Ryman Hospitality Properties | Pebblebrook Hotel vs. Sunstone Hotel Investors |
| Clipper Realty vs. Nexpoint Residential Trust | Clipper Realty vs. Centerspace | Clipper Realty vs. UDR Inc | Clipper Realty vs. BRT Realty Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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