Correlation Between Kandy Hotels and Aitken Spence
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By analyzing existing cross correlation between Kandy Hotels and Aitken Spence Hotel, you can compare the effects of market volatilities on Kandy Hotels and Aitken Spence 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 Aitken Spence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandy Hotels and Aitken Spence.
Diversification Opportunities for Kandy Hotels and Aitken Spence
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kandy and Aitken is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kandy Hotels and Aitken Spence Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aitken Spence Hotel 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 Aitken Spence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aitken Spence Hotel has no effect on the direction of Kandy Hotels i.e., Kandy Hotels and Aitken Spence go up and down completely randomly.
Pair Corralation between Kandy Hotels and Aitken Spence
Assuming the 90 days trading horizon Kandy Hotels is expected to generate 1.02 times less return on investment than Aitken Spence. In addition to that, Kandy Hotels is 1.21 times more volatile than Aitken Spence Hotel. It trades about 0.16 of its total potential returns per unit of risk. Aitken Spence Hotel is currently generating about 0.19 per unit of volatility. If you would invest 5,500 in Aitken Spence Hotel on August 31, 2024 and sell it today you would earn a total of 1,190 from holding Aitken Spence Hotel or generate 21.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.31% |
| Values | Daily Returns |
Kandy Hotels vs. Aitken Spence Hotel
Performance |
| Timeline |
| Kandy Hotels |
| Aitken Spence Hotel |
Kandy Hotels and Aitken Spence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandy Hotels and Aitken Spence
The main advantage of trading using opposite Kandy Hotels and Aitken Spence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandy Hotels position performs unexpectedly, Aitken Spence 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 Aitken Spence will offset losses from the drop in Aitken Spence's long position.| Kandy Hotels vs. Ceylinco Insurance PLC | Kandy Hotels vs. HATTON NATIONAL BANK | Kandy Hotels vs. Softlogic Life Insurance | Kandy Hotels vs. Amana Bank |
| Aitken Spence vs. Convenience Foods PLC | Aitken Spence vs. John Keells Hotels | Aitken Spence vs. Mahaweli Reach Hotel | Aitken Spence vs. RENUKA FOODS 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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