Correlation Between Comba Telecom and Pebblebrook Hotel

Can any of the company-specific risk be diversified away by investing in both Comba Telecom 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 Comba Telecom and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Comba Telecom Systems and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Comba Telecom 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 Comba Telecom with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and Pebblebrook Hotel.

Diversification Opportunities for Comba Telecom and Pebblebrook Hotel

-0.14

Correlation Coefficient

Comba Telecom  Pebblebrook Hotel

Good diversification

The 3 months correlation between Comba and Pebblebrook is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems 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 Comba Telecom 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 Comba Telecom Systems 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 Comba Telecom i.e., Comba Telecom and Pebblebrook Hotel go up and down completely randomly.

Pair Corralation between Comba Telecom and Pebblebrook Hotel

Assuming the 90 days trading horizon Comba Telecom Systems is expected to generate 2.28 times more return on investment than Pebblebrook Hotel. However, Comba Telecom is 2.28 times more volatile than Pebblebrook Hotel Trust. It trades about 0.02 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.01 per unit of risk. If you would invest  13.00  in Comba Telecom Systems on October 11, 2024 and sell it today you would lose (1.00) from holding Comba Telecom Systems or give up 7.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Comba Telecom Systems  vs.  Pebblebrook Hotel Trust

Comba Telecom Systems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Comba Telecom Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Comba Telecom may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pebblebrook Hotel Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pebblebrook Hotel Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Pebblebrook Hotel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comba Telecom and Pebblebrook Hotel

The main advantage of trading using opposite Comba Telecom and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comba Telecom 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.

The idea behind Comba Telecom Systems and Pebblebrook Hotel Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stocks Directory module to find actively traded stocks across global markets.