Correlation Between Kandy Hotels and ACL Cables
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By analyzing existing cross correlation between Kandy Hotels and ACL Cables PLC, you can compare the effects of market volatilities on Kandy Hotels and ACL Cables 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 Kandy Hotels with a short position of ACL Cables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandy Hotels and ACL Cables.
Diversification Opportunities for Kandy Hotels and ACL Cables
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kandy and ACL is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kandy Hotels and ACL Cables PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACL Cables PLC and Kandy Hotels 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 Kandy Hotels are associated (or correlated) with ACL Cables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACL Cables PLC has no effect on the direction of Kandy Hotels i.e., Kandy Hotels and ACL Cables go up and down completely randomly.
Pair Corralation between Kandy Hotels and ACL Cables
Assuming the 90 days trading horizon Kandy Hotels is expected to generate 2.13 times more return on investment than ACL Cables. However, Kandy Hotels is 2.13 times more volatile than ACL Cables PLC. It trades about 0.06 of its potential returns per unit of risk. ACL Cables PLC is currently generating about 0.1 per unit of risk. If you would invest 850.00 in Kandy Hotels on September 4, 2024 and sell it today you would earn a total of 280.00 from holding Kandy Hotels or generate 32.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.14% |
| Values | Daily Returns |
Kandy Hotels vs. ACL Cables PLC
Performance |
| Timeline |
| Kandy Hotels |
| ACL Cables PLC |
Kandy Hotels and ACL Cables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandy Hotels and ACL Cables
The main advantage of trading using opposite Kandy Hotels and ACL Cables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandy Hotels position performs unexpectedly, ACL Cables 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 ACL Cables will offset losses from the drop in ACL Cables' long position.| Kandy Hotels vs. Carson Cumberbatch PLC | Kandy Hotels vs. Nations Trust Bank | Kandy Hotels vs. Distilleries Company of |
| ACL Cables vs. Carson Cumberbatch PLC | ACL Cables vs. Nations Trust Bank | ACL Cables vs. Distilleries Company of |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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