Correlation Between Aitken Spence and Ceylon Hotels
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By analyzing existing cross correlation between Aitken Spence Hotel and Ceylon Hotels, you can compare the effects of market volatilities on Aitken Spence and Ceylon 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 Aitken Spence with a short position of Ceylon Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aitken Spence and Ceylon Hotels.
Diversification Opportunities for Aitken Spence and Ceylon Hotels
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aitken and Ceylon is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aitken Spence Hotel and Ceylon Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Hotels and Aitken Spence 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 Aitken Spence Hotel are associated (or correlated) with Ceylon Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Hotels has no effect on the direction of Aitken Spence i.e., Aitken Spence and Ceylon Hotels go up and down completely randomly.
Pair Corralation between Aitken Spence and Ceylon Hotels
Assuming the 90 days trading horizon Aitken Spence Hotel is expected to generate 0.78 times more return on investment than Ceylon Hotels. However, Aitken Spence Hotel is 1.29 times less risky than Ceylon Hotels. It trades about 0.03 of its potential returns per unit of risk. Ceylon Hotels is currently generating about 0.02 per unit of risk. If you would invest 5,910 in Aitken Spence Hotel on August 31, 2024 and sell it today you would earn a total of 780.00 from holding Aitken Spence Hotel or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Aitken Spence Hotel vs. Ceylon Hotels
Performance |
| Timeline |
| Aitken Spence Hotel |
| Ceylon Hotels |
Aitken Spence and Ceylon Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aitken Spence and Ceylon Hotels
The main advantage of trading using opposite Aitken Spence and Ceylon Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aitken Spence position performs unexpectedly, Ceylon 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 Ceylon Hotels will offset losses from the drop in Ceylon Hotels' long position.| Aitken Spence vs. Convenience Foods PLC | Aitken Spence vs. John Keells Hotels | Aitken Spence vs. Mahaweli Reach Hotel | Aitken Spence vs. RENUKA FOODS PLC |
| Ceylon Hotels vs. HNB Finance | Ceylon Hotels vs. Prime Lands Residencies | Ceylon Hotels vs. Jat Holdings PLC | Ceylon Hotels vs. E M L |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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