Correlation Between Direct Line and Selina Hospitality
Can any of the company-specific risk be diversified away by investing in both Direct Line and Selina Hospitality 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 Direct Line and Selina Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direct Line Insurance and Selina Hospitality PLC, you can compare the effects of market volatilities on Direct Line and Selina Hospitality 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 Direct Line with a short position of Selina Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Line and Selina Hospitality.
Diversification Opportunities for Direct Line and Selina Hospitality
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Direct and Selina is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Direct Line Insurance and Selina Hospitality PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selina Hospitality PLC and Direct Line 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 Direct Line Insurance are associated (or correlated) with Selina Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selina Hospitality PLC has no effect on the direction of Direct Line i.e., Direct Line and Selina Hospitality go up and down completely randomly.
Pair Corralation between Direct Line and Selina Hospitality
If you would invest 963.00 in Direct Line Insurance on September 13, 2024 and sell it today you would earn a total of 290.00 from holding Direct Line Insurance or generate 30.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 2.38% |
| Values | Daily Returns |
Direct Line Insurance vs. Selina Hospitality PLC
Performance |
| Timeline |
| Direct Line Insurance |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direct Line and Selina Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direct Line and Selina Hospitality
The main advantage of trading using opposite Direct Line and Selina Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Line position performs unexpectedly, Selina Hospitality 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 Selina Hospitality will offset losses from the drop in Selina Hospitality's long position.| Direct Line vs. Plexus Corp | Direct Line vs. Eltek | Direct Line vs. Dream Finders Homes | Direct Line vs. Hurco Companies |
| Selina Hospitality vs. GoHealth | Selina Hospitality vs. Direct Line Insurance | Selina Hospitality vs. Valneva SE ADR | Selina Hospitality vs. Kaltura |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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