Correlation Between Distilleries Company and Hotel Sigiriya
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By analyzing existing cross correlation between Distilleries Company of and Hotel Sigiriya PLC, you can compare the effects of market volatilities on Distilleries Company 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 Distilleries Company with a short position of Hotel Sigiriya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distilleries Company and Hotel Sigiriya.
Diversification Opportunities for Distilleries Company and Hotel Sigiriya
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Distilleries and Hotel is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Distilleries Company of 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 Distilleries Company 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 Distilleries Company of 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 Distilleries Company i.e., Distilleries Company and Hotel Sigiriya go up and down completely randomly.
Pair Corralation between Distilleries Company and Hotel Sigiriya
Assuming the 90 days trading horizon Distilleries Company of is expected to under-perform the Hotel Sigiriya. But the stock apears to be less risky and, when comparing its historical volatility, Distilleries Company of is 2.76 times less risky than Hotel Sigiriya. The stock trades about -0.19 of its potential returns per unit of risk. The Hotel Sigiriya PLC is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 8,210 in Hotel Sigiriya PLC on November 3, 2024 and sell it today you would lose (210.00) from holding Hotel Sigiriya PLC or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Distilleries Company of vs. Hotel Sigiriya PLC
Performance |
| Timeline |
| Distilleries Company |
| Hotel Sigiriya PLC |
Distilleries Company and Hotel Sigiriya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distilleries Company and Hotel Sigiriya
The main advantage of trading using opposite Distilleries Company and Hotel Sigiriya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distilleries Company 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.| Distilleries Company vs. Amaya Leisure PLC | Distilleries Company vs. Union Chemicals Lanka | Distilleries Company vs. BROWNS INVESTMENTS PLC | Distilleries Company vs. Trans Asia Hotels |
| Hotel Sigiriya vs. Tal Lanka Hotels | Hotel Sigiriya vs. Convenience Foods PLC | Hotel Sigiriya vs. Tangerine Beach Hotels | Hotel Sigiriya vs. Mahaweli Reach Hotel |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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