Correlation Between Eden Hotel and HVA Foods
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By analyzing existing cross correlation between Eden Hotel Lanka and HVA Foods PLC, you can compare the effects of market volatilities on Eden Hotel and HVA Foods 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 Eden Hotel with a short position of HVA Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eden Hotel and HVA Foods.
Diversification Opportunities for Eden Hotel and HVA Foods
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eden and HVA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eden Hotel Lanka and HVA Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HVA Foods PLC and Eden Hotel 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 Eden Hotel Lanka are associated (or correlated) with HVA Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HVA Foods PLC has no effect on the direction of Eden Hotel i.e., Eden Hotel and HVA Foods go up and down completely randomly.
Pair Corralation between Eden Hotel and HVA Foods
Assuming the 90 days trading horizon Eden Hotel Lanka is expected to generate 1.26 times more return on investment than HVA Foods. However, Eden Hotel is 1.26 times more volatile than HVA Foods PLC. It trades about 0.15 of its potential returns per unit of risk. HVA Foods PLC is currently generating about 0.01 per unit of risk. If you would invest 1,400 in Eden Hotel Lanka on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Eden Hotel Lanka or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eden Hotel Lanka vs. HVA Foods PLC
Performance |
| Timeline |
| Eden Hotel Lanka |
| HVA Foods PLC |
Eden Hotel and HVA Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eden Hotel and HVA Foods
The main advantage of trading using opposite Eden Hotel and HVA Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eden Hotel position performs unexpectedly, HVA Foods 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 HVA Foods will offset losses from the drop in HVA Foods' long position.| Eden Hotel vs. Lighthouse Hotel PLC | Eden Hotel vs. Aitken Spence Hotel | Eden Hotel vs. Dolphin Hotels PLC | Eden Hotel vs. Trans Asia Hotels |
| HVA Foods vs. Lanka Realty Investments | HVA Foods vs. RENUKA FOODS PLC | HVA Foods vs. Ceylon Beverage Holdings | HVA Foods vs. Lanka Milk Foods |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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