Correlation Between Ryman Hospitality and Pebblebrook Hotel

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

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

Diversification Opportunities for Ryman Hospitality and Pebblebrook Hotel

0.91

Correlation Coefficient

Ryman Hospitality  Pebblebrook Hotel

Almost no diversification

The 3 months correlation between Ryman and Pebblebrook is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Hospitality Properties 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 Ryman Hospitality 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 Ryman Hospitality Properties 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 Ryman Hospitality i.e., Ryman Hospitality and Pebblebrook Hotel go up and down completely randomly.

Pair Corralation between Ryman Hospitality and Pebblebrook Hotel

Considering the 90-day investment horizon Ryman Hospitality Properties is expected to generate 0.74 times more return on investment than Pebblebrook Hotel. However, Ryman Hospitality Properties is 1.36 times less risky than Pebblebrook Hotel. It trades about -0.13 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.2 per unit of risk. If you would invest  10,490  in Ryman Hospitality Properties on December 30, 2024 and sell it today you would lose (1,313) from holding Ryman Hospitality Properties or give up 12.52% of portfolio value over 90 days.

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

Ryman Hospitality Properties  vs.  Pebblebrook Hotel Trust

Ryman Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ryman Hospitality Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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. Despite sluggish performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ryman Hospitality and Pebblebrook Hotel

The main advantage of trading using opposite Ryman Hospitality and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryman Hospitality 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 Ryman Hospitality Properties 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.