Correlation Between Jat Holdings and Hotel Sigiriya
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By analyzing existing cross correlation between Jat Holdings PLC and Hotel Sigiriya PLC, you can compare the effects of market volatilities on Jat Holdings and Hotel Sigiriya 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 Jat Holdings with a short position of Hotel Sigiriya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jat Holdings and Hotel Sigiriya.
Diversification Opportunities for Jat Holdings and Hotel Sigiriya
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jat and Hotel is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jat Holdings PLC and Hotel Sigiriya PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sigiriya PLC and Jat Holdings 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 Jat Holdings PLC are associated (or correlated) with Hotel Sigiriya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sigiriya PLC has no effect on the direction of Jat Holdings i.e., Jat Holdings and Hotel Sigiriya go up and down completely randomly.
Pair Corralation between Jat Holdings and Hotel Sigiriya
Assuming the 90 days trading horizon Jat Holdings is expected to generate 1.63 times less return on investment than Hotel Sigiriya. But when comparing it to its historical volatility, Jat Holdings PLC is 1.35 times less risky than Hotel Sigiriya. It trades about 0.17 of its potential returns per unit of risk. Hotel Sigiriya PLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,390 in Hotel Sigiriya PLC on August 31, 2024 and sell it today you would earn a total of 1,620 from holding Hotel Sigiriya PLC or generate 36.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jat Holdings PLC vs. Hotel Sigiriya PLC
Performance |
| Timeline |
| Jat Holdings PLC |
| Hotel Sigiriya PLC |
Jat Holdings and Hotel Sigiriya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jat Holdings and Hotel Sigiriya
The main advantage of trading using opposite Jat Holdings and Hotel Sigiriya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jat Holdings position performs unexpectedly, Hotel Sigiriya 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 Hotel Sigiriya will offset losses from the drop in Hotel Sigiriya's long position.| Jat Holdings vs. RENUKA FOODS PLC | Jat Holdings vs. Lanka Milk Foods | Jat Holdings vs. BROWNS INVESTMENTS PLC | Jat Holdings vs. Kandy Hotels |
| Hotel Sigiriya vs. Ceylon Guardian Investment | Hotel Sigiriya vs. Lanka Milk Foods | Hotel Sigiriya vs. Hatton National Bank | Hotel Sigiriya vs. DFCC Bank 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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