Correlation Between LH Hotel and Dow Jones
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By analyzing existing cross correlation between LH Hotel Leasehold and Dow Jones Industrial, you can compare the effects of market volatilities on LH Hotel and Dow Jones 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 LH Hotel with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of LH Hotel and Dow Jones.
Diversification Opportunities for LH Hotel and Dow Jones
Weak diversification
The 3 months correlation between LHHOTEL and Dow is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding LH Hotel Leasehold and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and LH Hotel 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 LH Hotel Leasehold are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of LH Hotel i.e., LH Hotel and Dow Jones go up and down completely randomly.
Pair Corralation between LH Hotel and Dow Jones
Assuming the 90 days trading horizon LH Hotel Leasehold is expected to generate 1.8 times more return on investment than Dow Jones. However, LH Hotel is 1.8 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 1,025 in LH Hotel Leasehold on August 28, 2024 and sell it today you would earn a total of 325.00 from holding LH Hotel Leasehold or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.06% |
| Values | Daily Returns |
LH Hotel Leasehold vs. Dow Jones Industrial
Performance |
| Timeline |
LH Hotel and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
LH Hotel Leasehold
Pair trading matchups for LH Hotel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with LH Hotel and Dow Jones
The main advantage of trading using opposite LH Hotel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LH Hotel position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| LH Hotel vs. LH Shopping Centers | LH Hotel vs. Quality Houses Property | LH Hotel vs. Impact Growth REIT | LH Hotel vs. CPN Retail Growth |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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