Correlation Between SMA Solar and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Pebblebrook Hotel.
Diversification Opportunities for SMA Solar and Pebblebrook Hotel
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMA and Pebblebrook is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology 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 SMA Solar 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 SMA Solar Technology 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 SMA Solar i.e., SMA Solar and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between SMA Solar and Pebblebrook Hotel
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Pebblebrook Hotel. In addition to that, SMA Solar is 1.77 times more volatile than Pebblebrook Hotel Trust. It trades about -0.06 of its total potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.0 per unit of volatility. If you would invest 1,541 in Pebblebrook Hotel Trust on September 13, 2024 and sell it today you would lose (151.00) from holding Pebblebrook Hotel Trust or give up 9.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SMA Solar Technology vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| SMA Solar Technology |
| Pebblebrook Hotel Trust |
SMA Solar and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Pebblebrook Hotel
The main advantage of trading using opposite SMA Solar and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.| SMA Solar vs. Hochschild Mining plc | SMA Solar vs. CI GAMES SA | SMA Solar vs. GAMESTOP | SMA Solar vs. International Game Technology |
| Pebblebrook Hotel vs. Wayside Technology Group | Pebblebrook Hotel vs. SMA Solar Technology | Pebblebrook Hotel vs. GOLD ROAD RES | Pebblebrook Hotel vs. Computer And Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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