Correlation Between Pebblebrook Hotel and TERADATA
Can any of the company-specific risk be diversified away by investing in both Pebblebrook Hotel and TERADATA 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 TERADATA 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 TERADATA, you can compare the effects of market volatilities on Pebblebrook Hotel and TERADATA 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 TERADATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pebblebrook Hotel and TERADATA.
Diversification Opportunities for Pebblebrook Hotel and TERADATA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pebblebrook and TERADATA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pebblebrook Hotel Trust and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA 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 TERADATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of Pebblebrook Hotel i.e., Pebblebrook Hotel and TERADATA go up and down completely randomly.
Pair Corralation between Pebblebrook Hotel and TERADATA
Assuming the 90 days trading horizon Pebblebrook Hotel is expected to generate 2.99 times less return on investment than TERADATA. In addition to that, Pebblebrook Hotel is 1.83 times more volatile than TERADATA. It trades about 0.04 of its total potential returns per unit of risk. TERADATA is currently generating about 0.2 per unit of volatility. If you would invest 2,600 in TERADATA on September 23, 2024 and sell it today you would earn a total of 480.00 from holding TERADATA or generate 18.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pebblebrook Hotel Trust vs. TERADATA
Performance |
Timeline |
Pebblebrook Hotel Trust |
TERADATA |
Pebblebrook Hotel and TERADATA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pebblebrook Hotel and TERADATA
The main advantage of trading using opposite Pebblebrook Hotel and TERADATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pebblebrook Hotel position performs unexpectedly, TERADATA 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 TERADATA will offset losses from the drop in TERADATA's long position.Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc | Pebblebrook Hotel vs. Apple Inc |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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