Correlation Between E M and SERENDIB HOTELS
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By analyzing existing cross correlation between E M L and SERENDIB HOTELS PLC, you can compare the effects of market volatilities on E M 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 E M with a short position of SERENDIB HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of E M and SERENDIB HOTELS.
Diversification Opportunities for E M and SERENDIB HOTELS
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMLN0000 and SERENDIB is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding E M L 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 E M 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 E M L 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 E M i.e., E M and SERENDIB HOTELS go up and down completely randomly.
Pair Corralation between E M and SERENDIB HOTELS
Assuming the 90 days trading horizon E M is expected to generate 2.51 times less return on investment than SERENDIB HOTELS. In addition to that, E M is 1.24 times more volatile than SERENDIB HOTELS PLC. It trades about 0.07 of its total potential returns per unit of risk. SERENDIB HOTELS PLC is currently generating about 0.22 per unit of volatility. If you would invest 860.00 in SERENDIB HOTELS PLC on September 2, 2024 and sell it today you would earn a total of 390.00 from holding SERENDIB HOTELS PLC or generate 45.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
E M L vs. SERENDIB HOTELS PLC
Performance |
| Timeline |
| E M L |
| SERENDIB HOTELS PLC |
E M and SERENDIB HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E M and SERENDIB HOTELS
The main advantage of trading using opposite E M and SERENDIB HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E M 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.| E M vs. Union Chemicals Lanka | E M vs. CEYLINCO INSURANCE PLC | E M vs. HVA Foods PLC | E M vs. Ceylon Hospitals PLC |
| SERENDIB HOTELS vs. Prime Lands Residencies | SERENDIB HOTELS vs. VIDULLANKA PLC | SERENDIB HOTELS vs. EX PACK RUGATED CARTONS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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