Correlation Between CORNISH METALS and Pebblebrook Hotel

Can any of the company-specific risk be diversified away by investing in both CORNISH METALS 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 CORNISH METALS and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CORNISH METALS INC and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on CORNISH METALS 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 CORNISH METALS with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CORNISH METALS and Pebblebrook Hotel.

Diversification Opportunities for CORNISH METALS and Pebblebrook Hotel

0.61

Correlation Coefficient

CORNISH METALS  Pebblebrook Hotel

Poor diversification

The 3 months correlation between CORNISH and Pebblebrook is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CORNISH METALS INC 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 CORNISH METALS 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 CORNISH METALS INC 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 CORNISH METALS i.e., CORNISH METALS and Pebblebrook Hotel go up and down completely randomly.

Pair Corralation between CORNISH METALS and Pebblebrook Hotel

Assuming the 90 days trading horizon CORNISH METALS INC is expected to generate 2.6 times more return on investment than Pebblebrook Hotel. However, CORNISH METALS is 2.6 times more volatile than Pebblebrook Hotel Trust. It trades about 0.01 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about -0.02 per unit of risk. If you would invest  16.00  in CORNISH METALS INC on April 20, 2025 and sell it today you would lose (8.00) from holding CORNISH METALS INC or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

CORNISH METALS INC  vs.  Pebblebrook Hotel Trust

CORNISH METALS INC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CORNISH METALS INC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CORNISH METALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pebblebrook Hotel Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pebblebrook Hotel Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pebblebrook Hotel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CORNISH METALS and Pebblebrook Hotel

The main advantage of trading using opposite CORNISH METALS and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CORNISH METALS 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.

The idea behind CORNISH METALS INC and Pebblebrook Hotel Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.