Correlation Between Selina Hospitality and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Selina Hospitality 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 Selina Hospitality and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selina Hospitality PLC and Dow Jones Industrial, you can compare the effects of market volatilities on Selina Hospitality 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 Selina Hospitality with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selina Hospitality and Dow Jones.
Diversification Opportunities for Selina Hospitality and Dow Jones
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Selina and Dow is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Selina Hospitality PLC 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 Selina 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 Selina Hospitality PLC 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 Selina Hospitality i.e., Selina Hospitality and Dow Jones go up and down completely randomly.
Pair Corralation between Selina Hospitality and Dow Jones
Assuming the 90 days horizon Selina Hospitality PLC is expected to generate 94.37 times more return on investment than Dow Jones. However, Selina Hospitality is 94.37 times more volatile than Dow Jones Industrial. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 1.27 in Selina Hospitality PLC on September 2, 2024 and sell it today you would lose (0.27) from holding Selina Hospitality PLC or give up 21.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.21% |
| Values | Daily Returns |
Selina Hospitality PLC vs. Dow Jones Industrial
Performance |
| Timeline |
Selina Hospitality and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Selina Hospitality PLC
Pair trading matchups for Selina Hospitality
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Selina Hospitality and Dow Jones
The main advantage of trading using opposite Selina Hospitality and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selina Hospitality 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.| Selina Hospitality vs. Parker Hannifin | Selina Hospitality vs. National CineMedia | Selina Hospitality vs. Dave Busters Entertainment | Selina Hospitality vs. Mediag3 |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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