Correlation Between Pebblebrook Hotel and Park City

Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and Park City 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 Park City 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 Park City Group, you can compare the effects of market volatilities on Pebblebrook Hotel and Park City 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 Park City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and Park City.

Diversification Opportunities for Pebblebrook Hotel and Park City

0.63

Correlation Coefficient

Pebblebrook Hotel  Park City

Poor diversification

The 3 months correlation between Pebblebrook and Park is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and Park City Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park City Group 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 Park City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park City Group has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and Park City go up and down completely randomly.

Pair Corralation between Pebblebrook Hotel and Park City

Assuming the 90 days trading horizon Pebblebrook Hotel Trust is expected to under-perform the Park City. But the stock apears to be less risky and, when comparing its historical volatility, Pebblebrook Hotel Trust is 1.12 times less risky than Park City. The stock trades about -0.22 of its potential returns per unit of risk. The Park City Group is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,198  in Park City Group on December 23, 2024 and sell it today you would lose (368.00) from holding Park City Group or give up 16.74% of portfolio value over 90 days.

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

Pebblebrook Hotel Trust  vs.  Park City Group

Pebblebrook Hotel Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pebblebrook Hotel Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Park City Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Park City Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Pebblebrook Hotel and Park City

The main advantage of trading using opposite Pebblebrook Hotel and Park City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, Park City 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 Park City will offset losses from the drop in Park City's long position.

The idea behind Pebblebrook Hotel Trust and Park City Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.