Correlation Between Amana Bank and Browns Beach
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By analyzing existing cross correlation between Amana Bank and Browns Beach Hotels, you can compare the effects of market volatilities on Amana Bank 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 Amana Bank with a short position of Browns Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Bank and Browns Beach.
Diversification Opportunities for Amana Bank and Browns Beach
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amana and Browns is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Amana Bank 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 Amana Bank 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 Amana Bank 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 Amana Bank i.e., Amana Bank and Browns Beach go up and down completely randomly.
Pair Corralation between Amana Bank and Browns Beach
Assuming the 90 days trading horizon Amana Bank is expected to under-perform the Browns Beach. But the stock apears to be less risky and, when comparing its historical volatility, Amana Bank is 2.97 times less risky than Browns Beach. The stock trades about -0.18 of its potential returns per unit of risk. The Browns Beach Hotels is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Browns Beach Hotels on August 31, 2024 and sell it today you would earn a total of 150.00 from holding Browns Beach Hotels or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amana Bank vs. Browns Beach Hotels
Performance |
| Timeline |
| Amana Bank |
| Browns Beach Hotels |
Amana Bank and Browns Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amana Bank and Browns Beach
The main advantage of trading using opposite Amana Bank and Browns Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Bank 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.| Amana Bank vs. Sigiriya Village Hotels | Amana Bank vs. Dolphin Hotels PLC | Amana Bank vs. CEYLINCO INSURANCE PLC | Amana Bank vs. Distilleries Company of |
| Browns Beach vs. Ceylon Tobacco | Browns Beach vs. Nuwara Eliya Hotels | Browns Beach vs. Commercial Credit and | Browns Beach vs. Hatton National Bank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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