Correlation Between S Hotels and Dow Jones
Can any of the company-specific risk be diversified away by investing in both S Hotels and Dow Jones 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 S Hotels and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S Hotels and and Dow Jones Industrial, you can compare the effects of market volatilities on S Hotels 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 S Hotels with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of S Hotels and Dow Jones.
Diversification Opportunities for S Hotels and Dow Jones
Average diversification
The 3 months correlation between SHR and Dow is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding S Hotels and 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 S Hotels 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 S Hotels and 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 S Hotels i.e., S Hotels and Dow Jones go up and down completely randomly.
Pair Corralation between S Hotels and Dow Jones
Assuming the 90 days trading horizon S Hotels and is expected to generate 2.99 times more return on investment than Dow Jones. However, S Hotels is 2.99 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of risk. If you would invest 200.00 in S Hotels and on August 31, 2024 and sell it today you would earn a total of 20.00 from holding S Hotels and or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
S Hotels and vs. Dow Jones Industrial
Performance |
| Timeline |
S Hotels and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
S Hotels and
Pair trading matchups for S Hotels
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with S Hotels and Dow Jones
The main advantage of trading using opposite S Hotels and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S Hotels 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.| S Hotels vs. Central Plaza Hotel | S Hotels vs. The Erawan Group | S Hotels vs. Minor International Public | S Hotels vs. Advanced Info Service |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |