Correlation Between Eden Hotel and SERENDIB HOTELS
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By analyzing existing cross correlation between Eden Hotel Lanka and SERENDIB HOTELS PLC, you can compare the effects of market volatilities on Eden Hotel and SERENDIB HOTELS 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 SERENDIB HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eden Hotel and SERENDIB HOTELS.
Diversification Opportunities for Eden Hotel and SERENDIB HOTELS
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eden and SERENDIB is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eden Hotel Lanka and SERENDIB HOTELS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERENDIB HOTELS 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 SERENDIB HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERENDIB HOTELS PLC has no effect on the direction of Eden Hotel i.e., Eden Hotel and SERENDIB HOTELS go up and down completely randomly.
Pair Corralation between Eden Hotel and SERENDIB HOTELS
Assuming the 90 days trading horizon Eden Hotel Lanka is expected to generate 0.53 times more return on investment than SERENDIB HOTELS. However, Eden Hotel Lanka is 1.89 times less risky than SERENDIB HOTELS. It trades about -0.59 of its potential returns per unit of risk. SERENDIB HOTELS PLC is currently generating about -0.4 per unit of risk. If you would invest 1,630 in Eden Hotel Lanka on November 29, 2024 and sell it today you would lose (230.00) from holding Eden Hotel Lanka or give up 14.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eden Hotel Lanka vs. SERENDIB HOTELS PLC
Performance |
| Timeline |
| Eden Hotel Lanka |
| SERENDIB HOTELS PLC |
Eden Hotel and SERENDIB HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eden Hotel and SERENDIB HOTELS
The main advantage of trading using opposite Eden Hotel and SERENDIB HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eden Hotel position performs unexpectedly, SERENDIB HOTELS 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 SERENDIB HOTELS will offset losses from the drop in SERENDIB HOTELS's long position.| Eden Hotel vs. Hotel Sigiriya PLC | Eden Hotel vs. Colombo Investment Trust | Eden Hotel vs. CEYLON HOSPITALS PLC | Eden Hotel vs. Carson Cumberbatch PLC |
| SERENDIB HOTELS vs. Union Chemicals Lanka | SERENDIB HOTELS vs. Commercial Credit and | SERENDIB HOTELS vs. Palm Garden Hotels | SERENDIB HOTELS vs. Tal Lanka 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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