Correlation Between Jat Holdings and Renuka City
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By analyzing existing cross correlation between Jat Holdings PLC and Renuka City Hotel, you can compare the effects of market volatilities on Jat Holdings and Renuka City 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 Renuka City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jat Holdings and Renuka City.
Diversification Opportunities for Jat Holdings and Renuka City
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jat and Renuka is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jat Holdings PLC and Renuka City Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renuka City Hotel 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 Renuka City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renuka City Hotel has no effect on the direction of Jat Holdings i.e., Jat Holdings and Renuka City go up and down completely randomly.
Pair Corralation between Jat Holdings and Renuka City
Assuming the 90 days trading horizon Jat Holdings PLC is expected to generate 0.98 times more return on investment than Renuka City. However, Jat Holdings PLC is 1.02 times less risky than Renuka City. It trades about 0.07 of its potential returns per unit of risk. Renuka City Hotel is currently generating about 0.02 per unit of risk. If you would invest 1,250 in Jat Holdings PLC on September 13, 2024 and sell it today you would earn a total of 1,060 from holding Jat Holdings PLC or generate 84.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.94% |
| Values | Daily Returns |
Jat Holdings PLC vs. Renuka City Hotel
Performance |
| Timeline |
| Jat Holdings PLC |
| Renuka City Hotel |
Jat Holdings and Renuka City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jat Holdings and Renuka City
The main advantage of trading using opposite Jat Holdings and Renuka City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jat Holdings position performs unexpectedly, Renuka City 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 Renuka City will offset losses from the drop in Renuka City's long position.| Jat Holdings vs. Lanka Realty Investments | Jat Holdings vs. RENUKA FOODS PLC | Jat Holdings vs. Ceylon Hotels | Jat Holdings vs. Kandy Hotels |
| Renuka City vs. Jat Holdings PLC | Renuka City vs. Lanka Credit and | Renuka City vs. VIDULLANKA PLC | Renuka City vs. Carson Cumberbatch 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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