Correlation Between Hotel Sigiriya and Browns Beach
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By analyzing existing cross correlation between Hotel Sigiriya PLC and Browns Beach Hotels, you can compare the effects of market volatilities on Hotel Sigiriya and Browns Beach 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 Hotel Sigiriya with a short position of Browns Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Sigiriya and Browns Beach.
Diversification Opportunities for Hotel Sigiriya and Browns Beach
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hotel and Browns is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Sigiriya PLC and Browns Beach Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Browns Beach Hotels and Hotel Sigiriya 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 Hotel Sigiriya PLC are associated (or correlated) with Browns Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Browns Beach Hotels has no effect on the direction of Hotel Sigiriya i.e., Hotel Sigiriya and Browns Beach go up and down completely randomly.
Pair Corralation between Hotel Sigiriya and Browns Beach
Assuming the 90 days trading horizon Hotel Sigiriya is expected to generate 2.31 times less return on investment than Browns Beach. But when comparing it to its historical volatility, Hotel Sigiriya PLC is 1.4 times less risky than Browns Beach. It trades about 0.04 of its potential returns per unit of risk. Browns Beach Hotels is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,230 in Browns Beach Hotels on August 27, 2024 and sell it today you would earn a total of 360.00 from holding Browns Beach Hotels or generate 29.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.38% |
| Values | Daily Returns |
Hotel Sigiriya PLC vs. Browns Beach Hotels
Performance |
| Timeline |
| Hotel Sigiriya PLC |
| Browns Beach Hotels |
Hotel Sigiriya and Browns Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Sigiriya and Browns Beach
The main advantage of trading using opposite Hotel Sigiriya and Browns Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Sigiriya position performs unexpectedly, Browns Beach 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 Browns Beach will offset losses from the drop in Browns Beach's long position.| Hotel Sigiriya vs. Sigiriya Village Hotels | Hotel Sigiriya vs. Browns Beach Hotels | Hotel Sigiriya vs. Ceylinco Insurance PLC | Hotel Sigiriya vs. Trans Asia Hotels |
| Browns Beach vs. COMMERCIAL BANK OF | Browns Beach vs. National Development Bank | Browns Beach vs. Ceylon Hospitals PLC | Browns Beach vs. Union Chemicals Lanka |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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