Correlation Between Eden Hotel and Convenience Foods
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By analyzing existing cross correlation between Eden Hotel Lanka and Convenience Foods PLC, you can compare the effects of market volatilities on Eden Hotel and Convenience 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 Convenience Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eden Hotel and Convenience Foods.
Diversification Opportunities for Eden Hotel and Convenience Foods
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eden and Convenience is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eden Hotel Lanka and Convenience Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Convenience 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 Convenience Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Convenience Foods PLC has no effect on the direction of Eden Hotel i.e., Eden Hotel and Convenience Foods go up and down completely randomly.
Pair Corralation between Eden Hotel and Convenience Foods
Assuming the 90 days trading horizon Eden Hotel Lanka is expected to under-perform the Convenience Foods. But the stock apears to be less risky and, when comparing its historical volatility, Eden Hotel Lanka is 2.32 times less risky than Convenience Foods. The stock trades about -0.2 of its potential returns per unit of risk. The Convenience Foods PLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 98,650 in Convenience Foods PLC on November 30, 2024 and sell it today you would earn a total of 30,775 from holding Convenience Foods PLC or generate 31.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Eden Hotel Lanka vs. Convenience Foods PLC
Performance |
| Timeline |
| Eden Hotel Lanka |
| Convenience Foods PLC |
Eden Hotel and Convenience Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eden Hotel and Convenience Foods
The main advantage of trading using opposite Eden Hotel and Convenience Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eden Hotel position performs unexpectedly, Convenience 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 Convenience Foods will offset losses from the drop in Convenience Foods' long position.| Eden Hotel vs. Ceylon Hotels | Eden Hotel vs. Softlogic Life Insurance | Eden Hotel vs. Renuka City Hotel | Eden Hotel vs. Nations Trust Bank |
| Convenience Foods vs. DFCC Bank PLC | Convenience Foods vs. CEYLINCO INSURANCE PLC | Convenience Foods vs. HVA Foods PLC | Convenience Foods vs. Peoples Insurance 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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