Correlation Between Vornado Realty and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Vornado Realty 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 Vornado Realty and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vornado Realty Trust and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Vornado Realty 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 Vornado Realty with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vornado Realty and Pebblebrook Hotel.
Diversification Opportunities for Vornado Realty and Pebblebrook Hotel
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vornado and Pebblebrook is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vornado Realty Trust 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 Vornado Realty 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 Vornado Realty Trust 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 Vornado Realty i.e., Vornado Realty and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Vornado Realty and Pebblebrook Hotel
Assuming the 90 days trading horizon Vornado Realty Trust is expected to under-perform the Pebblebrook Hotel. In addition to that, Vornado Realty is 1.31 times more volatile than Pebblebrook Hotel Trust. It trades about -0.16 of its total potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.15 per unit of volatility. If you would invest 2,278 in Pebblebrook Hotel Trust on August 27, 2024 and sell it today you would lose (62.00) from holding Pebblebrook Hotel Trust or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vornado Realty Trust vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| Vornado Realty Trust |
| Pebblebrook Hotel Trust |
Vornado Realty and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vornado Realty and Pebblebrook Hotel
The main advantage of trading using opposite Vornado Realty and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vornado Realty 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.| Vornado Realty vs. Vornado Realty Trust | Vornado Realty vs. Vornado Realty Trust | Vornado Realty vs. Vornado Realty Trust | Vornado Realty vs. Empire State Realty |
| Pebblebrook Hotel vs. Ashford Hospitality Trust | Pebblebrook Hotel vs. Braemar Hotels Resorts | Pebblebrook Hotel vs. Braemar Hotels Resorts | Pebblebrook Hotel vs. Aspen Digital |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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