Correlation Between Whitestone REIT and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both Whitestone REIT 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 Whitestone REIT and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitestone REIT and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on Whitestone REIT 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 Whitestone REIT with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitestone REIT and Pebblebrook Hotel.
Diversification Opportunities for Whitestone REIT and Pebblebrook Hotel
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Whitestone and Pebblebrook is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Whitestone REIT 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 Whitestone REIT 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 Whitestone REIT 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 Whitestone REIT i.e., Whitestone REIT and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between Whitestone REIT and Pebblebrook Hotel
Considering the 90-day investment horizon Whitestone REIT is expected to generate 0.58 times more return on investment than Pebblebrook Hotel. However, Whitestone REIT is 1.73 times less risky than Pebblebrook Hotel. It trades about 0.04 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.22 per unit of risk. If you would invest 1,401 in Whitestone REIT on December 24, 2024 and sell it today you would earn a total of 33.00 from holding Whitestone REIT or generate 2.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Whitestone REIT vs. Pebblebrook Hotel Trust
Performance |
Timeline |
Whitestone REIT |
Pebblebrook Hotel Trust |
Whitestone REIT and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Whitestone REIT and Pebblebrook Hotel
The main advantage of trading using opposite Whitestone REIT and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitestone REIT 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.Whitestone REIT vs. Regency Centers | Whitestone REIT vs. Saul Centers | Whitestone REIT vs. Rithm Property Trust | Whitestone REIT vs. Site Centers Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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