Correlation Between Pacific Gas and Sotherly Hotels
Can any of the company-specific risk be diversified away by investing in both Pacific Gas and Sotherly Hotels 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 Pacific Gas and Sotherly Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Gas and and Sotherly Hotels Pref, you can compare the effects of market volatilities on Pacific Gas and Sotherly Hotels 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 Pacific Gas with a short position of Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Gas and Sotherly Hotels.
Diversification Opportunities for Pacific Gas and Sotherly Hotels
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pacific and Sotherly is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Gas and and Sotherly Hotels Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels Pref and Pacific Gas 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 Pacific Gas and are associated (or correlated) with Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels Pref has no effect on the direction of Pacific Gas i.e., Pacific Gas and Sotherly Hotels go up and down completely randomly.
Pair Corralation between Pacific Gas and Sotherly Hotels
Assuming the 90 days trading horizon Pacific Gas and is expected to generate 0.51 times more return on investment than Sotherly Hotels. However, Pacific Gas and is 1.98 times less risky than Sotherly Hotels. It trades about 0.08 of its potential returns per unit of risk. Sotherly Hotels Pref is currently generating about 0.01 per unit of risk. If you would invest 1,544 in Pacific Gas and on September 7, 2024 and sell it today you would earn a total of 396.00 from holding Pacific Gas and or generate 25.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 94.78% |
Values | Daily Returns |
Pacific Gas and vs. Sotherly Hotels Pref
Performance |
Timeline |
Pacific Gas |
Sotherly Hotels Pref |
Pacific Gas and Sotherly Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pacific Gas and Sotherly Hotels
The main advantage of trading using opposite Pacific Gas and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Gas position performs unexpectedly, Sotherly Hotels 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 Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and |
Sotherly Hotels vs. Sotherly Hotels | Sotherly Hotels vs. Braemar Hotel Resorts | Sotherly Hotels vs. Summit Hotel Properties | Sotherly Hotels vs. Service Properties Trust |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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