Correlation Between TRAVEL + and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both TRAVEL + 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 TRAVEL + and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on TRAVEL + 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 TRAVEL + with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and Pebblebrook Hotel.
Diversification Opportunities for TRAVEL + and Pebblebrook Hotel
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TRAVEL and Pebblebrook is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 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 TRAVEL + 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 TRAVEL LEISURE DL 01 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 TRAVEL + i.e., TRAVEL + and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between TRAVEL + and Pebblebrook Hotel
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 0.89 times more return on investment than Pebblebrook Hotel. However, TRAVEL LEISURE DL 01 is 1.13 times less risky than Pebblebrook Hotel. It trades about 0.32 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.04 per unit of risk. If you would invest 4,820 in TRAVEL LEISURE DL 01 on November 6, 2024 and sell it today you would earn a total of 480.00 from holding TRAVEL LEISURE DL 01 or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| Pebblebrook Hotel Trust |
TRAVEL + and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL + and Pebblebrook Hotel
The main advantage of trading using opposite TRAVEL + and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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.| TRAVEL + vs. Nomad Foods | TRAVEL + vs. United Rentals | TRAVEL + vs. SENECA FOODS A | TRAVEL + vs. ALBIS LEASING AG |
| Pebblebrook Hotel vs. PennyMac Mortgage Investment | Pebblebrook Hotel vs. NH HOTEL GROUP | Pebblebrook Hotel vs. Regal Hotels International | Pebblebrook Hotel vs. SLR Investment Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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