Correlation Between Pebblebrook Hotel and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Southern Copper 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 Pebblebrook Hotel and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pebblebrook Hotel Trust and Southern Copper, you can compare the effects of market volatilities on Pebblebrook Hotel and Southern Copper 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 Pebblebrook Hotel with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Southern Copper.
Diversification Opportunities for Pebblebrook Hotel and Southern Copper
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pebblebrook and Southern is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper and Pebblebrook Hotel 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 Pebblebrook Hotel Trust are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Southern Copper go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and Southern Copper
Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to generate 0.9 times more return on investment than Southern Copper. However, Pebblebrook Hotel Trust is 1.11 times less risky than Southern Copper. It trades about -0.03 of its potential returns per unit of risk. Southern Copper is currently generating about -0.15 per unit of risk. If you would invest 1,290 in Pebblebrook Hotel Trust on September 26, 2024 and sell it today you would lose (20.00) from holding Pebblebrook Hotel Trust or give up 1.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pebblebrook Hotel Trust vs. Southern Copper
Performance |
Timeline |
Pebblebrook Hotel Trust |
Southern Copper |
Pebblebrook Hotel and Southern Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pebblebrook Hotel and Southern Copper
The main advantage of trading using opposite Pebblebrook Hotel and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.Pebblebrook Hotel vs. VARIOUS EATERIES LS | Pebblebrook Hotel vs. BJs Restaurants | Pebblebrook Hotel vs. OFFICE DEPOT | Pebblebrook Hotel vs. Aegean Airlines SA |
Southern Copper vs. AEON STORES | Southern Copper vs. BE Semiconductor Industries | Southern Copper vs. Canadian Utilities Limited | Southern Copper vs. MARKET VECTR RETAIL |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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