Correlation Between Dow Jones and Centara Hotels
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Centara 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 Dow Jones and Centara Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Centara Hotels Resorts, you can compare the effects of market volatilities on Dow Jones and Centara 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 Centara Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Centara Hotels.
Diversification Opportunities for Dow Jones and Centara Hotels
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Centara is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Centara Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centara Hotels Resorts 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 Centara Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centara Hotels Resorts has no effect on the direction of Dow Jones i.e., Dow Jones and Centara Hotels go up and down completely randomly.
Pair Corralation between Dow Jones and Centara Hotels
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Centara Hotels. In addition to that, Dow Jones is 1.47 times more volatile than Centara Hotels Resorts. It trades about -0.16 of its total potential returns per unit of risk. Centara Hotels Resorts is currently generating about 0.05 per unit of volatility. If you would invest 436.00 in Centara Hotels Resorts on December 1, 2024 and sell it today you would earn a total of 2.00 from holding Centara Hotels Resorts or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Centara Hotels Resorts
Performance |
| Timeline |
Dow Jones and Centara Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Centara Hotels Resorts
Pair trading matchups for Centara Hotels
Pair Trading with Dow Jones and Centara Hotels
The main advantage of trading using opposite Dow Jones and Centara Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Centara 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 Centara Hotels will offset losses from the drop in Centara Hotels' long position.| Dow Jones vs. Cannae Holdings | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. SEI Investments | Dow Jones vs. Cracker Barrel Old |
| Centara Hotels vs. CPN Commercial Growth | Centara Hotels vs. HEMARAJ INDUSTRIAL PROPERTY | Centara Hotels vs. Future Park Leasehold |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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