Correlation Between BJs Restaurants and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants 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 BJs Restaurants and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on BJs Restaurants 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 BJs Restaurants with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Pebblebrook Hotel.
Diversification Opportunities for BJs Restaurants and Pebblebrook Hotel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BJs and Pebblebrook is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants i.e., BJs Restaurants and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between BJs Restaurants and Pebblebrook Hotel
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.24 times more return on investment than Pebblebrook Hotel. However, BJs Restaurants is 1.24 times more volatile than Pebblebrook Hotel Trust. It trades about 0.03 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.01 per unit of risk. If you would invest 2,620 in BJs Restaurants on September 26, 2024 and sell it today you would earn a total of 720.00 from holding BJs Restaurants or generate 27.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BJs Restaurants vs. Pebblebrook Hotel Trust
Performance |
Timeline |
BJs Restaurants |
Pebblebrook Hotel Trust |
BJs Restaurants and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BJs Restaurants and Pebblebrook Hotel
The main advantage of trading using opposite BJs Restaurants and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants 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.BJs Restaurants vs. ePlay Digital | BJs Restaurants vs. Liberty Broadband | BJs Restaurants vs. Transportadora de Gas | BJs Restaurants vs. TEXAS ROADHOUSE |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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