Correlation Between Browns Beach and Union Chemicals
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By analyzing existing cross correlation between Browns Beach Hotels and Union Chemicals Lanka, you can compare the effects of market volatilities on Browns Beach and Union Chemicals 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 Union Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Browns Beach and Union Chemicals.
Diversification Opportunities for Browns Beach and Union Chemicals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Browns and Union is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Browns Beach Hotels and Union Chemicals Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Chemicals Lanka 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 Union Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Chemicals Lanka has no effect on the direction of Browns Beach i.e., Browns Beach and Union Chemicals go up and down completely randomly.
Pair Corralation between Browns Beach and Union Chemicals
Assuming the 90 days trading horizon Browns Beach Hotels is expected to generate 7.43 times more return on investment than Union Chemicals. However, Browns Beach is 7.43 times more volatile than Union Chemicals Lanka. It trades about 0.3 of its potential returns per unit of risk. Union Chemicals Lanka is currently generating about 0.0 per unit of risk. If you would invest 1,350 in Browns Beach Hotels on August 27, 2024 and sell it today you would earn a total of 240.00 from holding Browns Beach Hotels or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Browns Beach Hotels vs. Union Chemicals Lanka
Performance |
| Timeline |
| Browns Beach Hotels |
| Union Chemicals Lanka |
Browns Beach and Union Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Browns Beach and Union Chemicals
The main advantage of trading using opposite Browns Beach and Union Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Browns Beach position performs unexpectedly, Union Chemicals 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 Union Chemicals will offset losses from the drop in Union Chemicals' long position.| Browns Beach vs. Softlogic Life Insurance | Browns Beach vs. Nuwara Eliya Hotels | Browns Beach vs. John Keells Hotels | Browns Beach vs. CEYLINCO INSURANCE PLC |
| Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. Singhe Hospitals | Union Chemicals vs. Lanka Realty Investments | Union Chemicals vs. RENUKA FOODS 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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