Correlation Between Dow Jones and Kandy Hotels
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By analyzing existing cross correlation between Dow Jones Industrial and Kandy Hotels, you can compare the effects of market volatilities on Dow Jones and Kandy 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 Kandy Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Kandy Hotels.
Diversification Opportunities for Dow Jones and Kandy Hotels
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Kandy is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Kandy Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandy Hotels 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 Kandy Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandy Hotels has no effect on the direction of Dow Jones i.e., Dow Jones and Kandy Hotels go up and down completely randomly.
Pair Corralation between Dow Jones and Kandy Hotels
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.31 times more return on investment than Kandy Hotels. However, Dow Jones Industrial is 3.24 times less risky than Kandy Hotels. It trades about -0.21 of its potential returns per unit of risk. Kandy Hotels is currently generating about -0.08 per unit of risk. If you would invest 4,471,358 in Dow Jones Industrial on November 28, 2024 and sell it today you would lose (128,046) from holding Dow Jones Industrial or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. Kandy Hotels
Performance |
| Timeline |
Dow Jones and Kandy Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Kandy Hotels
Pair trading matchups for Kandy Hotels
Pair Trading with Dow Jones and Kandy Hotels
The main advantage of trading using opposite Dow Jones and Kandy Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Kandy 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 Kandy Hotels will offset losses from the drop in Kandy Hotels' long position.| Dow Jones vs. Starbucks | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Finnair Oyj | Dow Jones vs. Mesa Air Group |
| Kandy Hotels vs. RENUKA FOODS PLC | Kandy Hotels vs. Lighthouse Hotel PLC | Kandy Hotels vs. Renuka City Hotel | Kandy Hotels vs. Tangerine Beach Hotels |
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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