Correlation Between Ryman Hospitality and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Ryman Hospitality and Pebblebrook Hotel 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 Ryman Hospitality and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ryman Hospitality Properties and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Ryman Hospitality and Pebblebrook Hotel 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 Ryman Hospitality with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryman Hospitality and Pebblebrook Hotel.
Diversification Opportunities for Ryman Hospitality and Pebblebrook Hotel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ryman and Pebblebrook is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Hospitality Properties and Pebblebrook Hotel Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pebblebrook Hotel Trust and Ryman Hospitality 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 Ryman Hospitality Properties are associated (or correlated) with Pebblebrook Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pebblebrook Hotel Trust has no effect on the direction of Ryman Hospitality i.e., Ryman Hospitality and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Ryman Hospitality and Pebblebrook Hotel
Considering the 90-day investment horizon Ryman Hospitality Properties is expected to generate 0.9 times more return on investment than Pebblebrook Hotel. However, Ryman Hospitality Properties is 1.11 times less risky than Pebblebrook Hotel. It trades about -0.02 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.41 per unit of risk. If you would invest 10,296 in Ryman Hospitality Properties on November 18, 2024 and sell it today you would lose (57.00) from holding Ryman Hospitality Properties or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ryman Hospitality Properties vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Ryman Hospitality |
| Pebblebrook Hotel Trust |
Ryman Hospitality and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ryman Hospitality and Pebblebrook Hotel
The main advantage of trading using opposite Ryman Hospitality and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryman Hospitality position performs unexpectedly, Pebblebrook Hotel 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 Pebblebrook Hotel will offset losses from the drop in Pebblebrook Hotel's long position.| Ryman Hospitality vs. RLJ Lodging Trust | Ryman Hospitality vs. Pebblebrook Hotel Trust | Ryman Hospitality vs. Xenia Hotels Resorts | Ryman Hospitality vs. Sunstone Hotel Investors |
| Pebblebrook Hotel vs. RLJ Lodging Trust | Pebblebrook Hotel vs. Sunstone Hotel Investors | Pebblebrook Hotel vs. Diamondrock Hospitality | Pebblebrook Hotel vs. Summit Hotel Properties |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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