Correlation Between Event Hospitality and Scentre
Can any of the company-specific risk be diversified away by investing in both Event Hospitality and Scentre 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 Event Hospitality and Scentre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Event Hospitality and and Scentre Group, you can compare the effects of market volatilities on Event Hospitality and Scentre 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 Event Hospitality with a short position of Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Event Hospitality and Scentre.
Diversification Opportunities for Event Hospitality and Scentre
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Event and Scentre is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Event Hospitality and and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre Group and Event Hospitality 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 Event Hospitality and are associated (or correlated) with Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Event Hospitality i.e., Event Hospitality and Scentre go up and down completely randomly.
Pair Corralation between Event Hospitality and Scentre
Assuming the 90 days trading horizon Event Hospitality is expected to generate 1.15 times less return on investment than Scentre. In addition to that, Event Hospitality is 1.55 times more volatile than Scentre Group. It trades about 0.22 of its total potential returns per unit of risk. Scentre Group is currently generating about 0.39 per unit of volatility. If you would invest 349.00 in Scentre Group on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Scentre Group or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Event Hospitality and vs. Scentre Group
Performance |
| Timeline |
| Event Hospitality |
| Scentre Group |
Event Hospitality and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Event Hospitality and Scentre
The main advantage of trading using opposite Event Hospitality and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Event Hospitality position performs unexpectedly, Scentre 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 Scentre will offset losses from the drop in Scentre's long position.| Event Hospitality vs. Complii FinTech Solutions | Event Hospitality vs. Technology One | Event Hospitality vs. FireFly Metals | Event Hospitality vs. High Tech Metals |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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