Correlation Between Dow Jones and BTG Hotels
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By analyzing existing cross correlation between Dow Jones Industrial and BTG Hotels Group, you can compare the effects of market volatilities on Dow Jones and BTG 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 Dow Jones with a short position of BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and BTG Hotels.
Diversification Opportunities for Dow Jones and BTG Hotels
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and BTG is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels Group and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Dow Jones i.e., Dow Jones and BTG Hotels go up and down completely randomly.
Pair Corralation between Dow Jones and BTG Hotels
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.53 times more return on investment than BTG Hotels. However, Dow Jones Industrial is 1.87 times less risky than BTG Hotels. It trades about 0.27 of its potential returns per unit of risk. BTG Hotels Group is currently generating about 0.04 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. BTG Hotels Group
Performance |
| Timeline |
Dow Jones and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
BTG Hotels Group
Pair trading matchups for BTG Hotels
Pair Trading with Dow Jones and BTG Hotels
The main advantage of trading using opposite Dow Jones and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, BTG 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 BTG Hotels will offset losses from the drop in BTG Hotels' long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| BTG Hotels vs. Biwin Storage Technology | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Industrial and Commercial | BTG Hotels vs. China Construction Bank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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