Correlation Between Aitken Spence and John Keells
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By analyzing existing cross correlation between Aitken Spence Hotel and John Keells Hotels, you can compare the effects of market volatilities on Aitken Spence and John Keells 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 John Keells. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aitken Spence and John Keells.
Diversification Opportunities for Aitken Spence and John Keells
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aitken and John is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aitken Spence Hotel and John Keells Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Keells 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 John Keells. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Keells Hotels has no effect on the direction of Aitken Spence i.e., Aitken Spence and John Keells go up and down completely randomly.
Pair Corralation between Aitken Spence and John Keells
Assuming the 90 days trading horizon Aitken Spence Hotel is expected to generate 1.07 times more return on investment than John Keells. However, Aitken Spence is 1.07 times more volatile than John Keells Hotels. It trades about 0.02 of its potential returns per unit of risk. John Keells Hotels is currently generating about 0.01 per unit of risk. If you would invest 5,750 in Aitken Spence Hotel on August 27, 2024 and sell it today you would earn a total of 820.00 from holding Aitken Spence Hotel or generate 14.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Aitken Spence Hotel vs. John Keells Hotels
Performance |
| Timeline |
| Aitken Spence Hotel |
| John Keells Hotels |
Aitken Spence and John Keells Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aitken Spence and John Keells
The main advantage of trading using opposite Aitken Spence and John Keells positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aitken Spence position performs unexpectedly, John Keells 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 John Keells will offset losses from the drop in John Keells' long position.| Aitken Spence vs. Browns Beach Hotels | Aitken Spence vs. Trans Asia Hotels | Aitken Spence vs. Kandy Hotels | Aitken Spence vs. Lanka Realty Investments |
| John Keells vs. Lanka Credit and | John Keells vs. HVA Foods PLC | John Keells vs. CEYLINCO INSURANCE PLC | John Keells 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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