Correlation Between Softlogic Life and Browns Beach
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By analyzing existing cross correlation between Softlogic Life Insurance and Browns Beach Hotels, you can compare the effects of market volatilities on Softlogic Life and Browns Beach 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 Softlogic Life with a short position of Browns Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softlogic Life and Browns Beach.
Diversification Opportunities for Softlogic Life and Browns Beach
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Softlogic and Browns is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Softlogic Life Insurance and Browns Beach Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Browns Beach Hotels and Softlogic Life 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 Softlogic Life Insurance are associated (or correlated) with Browns Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Browns Beach Hotels has no effect on the direction of Softlogic Life i.e., Softlogic Life and Browns Beach go up and down completely randomly.
Pair Corralation between Softlogic Life and Browns Beach
Assuming the 90 days trading horizon Softlogic Life Insurance is expected to generate 0.88 times more return on investment than Browns Beach. However, Softlogic Life Insurance is 1.14 times less risky than Browns Beach. It trades about 0.03 of its potential returns per unit of risk. Browns Beach Hotels is currently generating about 0.02 per unit of risk. If you would invest 5,100 in Softlogic Life Insurance on August 27, 2024 and sell it today you would earn a total of 850.00 from holding Softlogic Life Insurance or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.87% |
| Values | Daily Returns |
Softlogic Life Insurance vs. Browns Beach Hotels
Performance |
| Timeline |
| Softlogic Life Insurance |
| Browns Beach Hotels |
Softlogic Life and Browns Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softlogic Life and Browns Beach
The main advantage of trading using opposite Softlogic Life and Browns Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softlogic Life position performs unexpectedly, Browns Beach 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 Browns Beach will offset losses from the drop in Browns Beach's long position.| Softlogic Life vs. COMMERCIAL BANK OF | Softlogic Life vs. Amaya Leisure PLC | Softlogic Life vs. Ceylinco Insurance PLC | Softlogic Life vs. Janashakthi Insurance |
| Browns Beach vs. Softlogic Life Insurance | Browns Beach vs. Nuwara Eliya Hotels | Browns Beach vs. John Keells Hotels | Browns Beach vs. CEYLINCO INSURANCE PLC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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