Correlation Between CHINA EDUCATION and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Pebblebrook Hotel.
Diversification Opportunities for CHINA EDUCATION and Pebblebrook Hotel
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Pebblebrook is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Pebblebrook Hotel
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Pebblebrook Hotel. In addition to that, CHINA EDUCATION is 1.25 times more volatile than Pebblebrook Hotel Trust. It trades about -0.15 of its total potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.06 per unit of volatility. If you would invest 1,260 in Pebblebrook Hotel Trust on September 23, 2024 and sell it today you would earn a total of 30.00 from holding Pebblebrook Hotel Trust or generate 2.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CHINA EDUCATION GROUP vs. Pebblebrook Hotel Trust
Performance |
Timeline |
CHINA EDUCATION GROUP |
Pebblebrook Hotel Trust |
CHINA EDUCATION and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHINA EDUCATION and Pebblebrook Hotel
The main advantage of trading using opposite CHINA EDUCATION and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.CHINA EDUCATION vs. Pebblebrook Hotel Trust | CHINA EDUCATION vs. WT OFFSHORE | CHINA EDUCATION vs. Live Nation Entertainment | CHINA EDUCATION vs. Hyatt Hotels |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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