Correlation Between Browns Beach and Hotel Sigiriya
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By analyzing existing cross correlation between Browns Beach Hotels and Hotel Sigiriya PLC, you can compare the effects of market volatilities on Browns Beach and Hotel Sigiriya 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 Browns Beach with a short position of Hotel Sigiriya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Browns Beach and Hotel Sigiriya.
Diversification Opportunities for Browns Beach and Hotel Sigiriya
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Browns and Hotel is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Browns Beach Hotels and Hotel Sigiriya PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sigiriya PLC and Browns Beach 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 Browns Beach Hotels are associated (or correlated) with Hotel Sigiriya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sigiriya PLC has no effect on the direction of Browns Beach i.e., Browns Beach and Hotel Sigiriya go up and down completely randomly.
Pair Corralation between Browns Beach and Hotel Sigiriya
Assuming the 90 days trading horizon Browns Beach is expected to generate 1.79 times less return on investment than Hotel Sigiriya. But when comparing it to its historical volatility, Browns Beach Hotels is 1.13 times less risky than Hotel Sigiriya. It trades about 0.2 of its potential returns per unit of risk. Hotel Sigiriya PLC is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,900 in Hotel Sigiriya PLC on August 30, 2024 and sell it today you would earn a total of 1,040 from holding Hotel Sigiriya PLC or generate 21.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Browns Beach Hotels vs. Hotel Sigiriya PLC
Performance |
| Timeline |
| Browns Beach Hotels |
| Hotel Sigiriya PLC |
Browns Beach and Hotel Sigiriya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Browns Beach and Hotel Sigiriya
The main advantage of trading using opposite Browns Beach and Hotel Sigiriya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Browns Beach position performs unexpectedly, Hotel Sigiriya 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 Hotel Sigiriya will offset losses from the drop in Hotel Sigiriya's long position.| Browns Beach vs. EX PACK RUGATED CARTONS | Browns Beach vs. PANASIAN POWER PLC | Browns Beach vs. Distilleries Company of | Browns Beach vs. Palm Garden Hotels |
| Hotel Sigiriya vs. EX PACK RUGATED CARTONS | Hotel Sigiriya vs. PANASIAN POWER PLC | Hotel Sigiriya vs. Distilleries Company of | Hotel Sigiriya vs. Palm Garden Hotels |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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