Correlation Between ACL Cables and Kandy Hotels
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By analyzing existing cross correlation between ACL Cables PLC and Kandy Hotels, you can compare the effects of market volatilities on ACL Cables and Kandy Hotels 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 ACL Cables with a short position of Kandy Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACL Cables and Kandy Hotels.
Diversification Opportunities for ACL Cables and Kandy Hotels
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ACL and Kandy is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ACL Cables PLC and Kandy Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandy Hotels and ACL Cables 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 ACL Cables PLC are associated (or correlated) with Kandy Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandy Hotels has no effect on the direction of ACL Cables i.e., ACL Cables and Kandy Hotels go up and down completely randomly.
Pair Corralation between ACL Cables and Kandy Hotels
Assuming the 90 days trading horizon ACL Cables PLC is expected to generate 0.9 times more return on investment than Kandy Hotels. However, ACL Cables PLC is 1.11 times less risky than Kandy Hotels. It trades about -0.05 of its potential returns per unit of risk. Kandy Hotels is currently generating about -0.08 per unit of risk. If you would invest 13,500 in ACL Cables PLC on November 28, 2024 and sell it today you would lose (275.00) from holding ACL Cables PLC or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACL Cables PLC vs. Kandy Hotels
Performance |
| Timeline |
| ACL Cables PLC |
| Kandy Hotels |
ACL Cables and Kandy Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACL Cables and Kandy Hotels
The main advantage of trading using opposite ACL Cables and Kandy Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACL Cables position performs unexpectedly, Kandy Hotels 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 Kandy Hotels will offset losses from the drop in Kandy Hotels' long position.| ACL Cables vs. Softlogic Life Insurance | ACL Cables vs. Arpico Insurance | ACL Cables vs. CEYLINCO INSURANCE PLC | ACL Cables vs. Ceylinco Insurance PLC |
| Kandy Hotels vs. Hatton National Bank | Kandy Hotels vs. Sampath Bank PLC | Kandy Hotels vs. Peoples Insurance PLC | Kandy Hotels vs. Ceylon Hospitals 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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