Correlation Between Kandy Hotels and Arpico Insurance
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By analyzing existing cross correlation between Kandy Hotels and Arpico Insurance, you can compare the effects of market volatilities on Kandy Hotels and Arpico Insurance 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 Arpico Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandy Hotels and Arpico Insurance.
Diversification Opportunities for Kandy Hotels and Arpico Insurance
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kandy and Arpico is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kandy Hotels and Arpico Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arpico Insurance 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 Arpico Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arpico Insurance has no effect on the direction of Kandy Hotels i.e., Kandy Hotels and Arpico Insurance go up and down completely randomly.
Pair Corralation between Kandy Hotels and Arpico Insurance
Assuming the 90 days trading horizon Kandy Hotels is expected to generate 1.01 times more return on investment than Arpico Insurance. However, Kandy Hotels is 1.01 times more volatile than Arpico Insurance. It trades about 0.18 of its potential returns per unit of risk. Arpico Insurance is currently generating about -0.38 per unit of risk. If you would invest 820.00 in Kandy Hotels on August 27, 2024 and sell it today you would earn a total of 60.00 from holding Kandy Hotels or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Kandy Hotels vs. Arpico Insurance
Performance |
| Timeline |
| Kandy Hotels |
| Arpico Insurance |
Kandy Hotels and Arpico Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandy Hotels and Arpico Insurance
The main advantage of trading using opposite Kandy Hotels and Arpico Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandy Hotels position performs unexpectedly, Arpico Insurance 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 Arpico Insurance will offset losses from the drop in Arpico Insurance's long position.| Kandy Hotels vs. COMMERCIAL BANK OF | Kandy Hotels vs. Convenience Foods PLC | Kandy Hotels vs. Sampath Bank PLC | Kandy Hotels vs. HVA Foods PLC |
| Arpico Insurance vs. Nuwara Eliya Hotels | Arpico Insurance vs. Hotel Sigiriya PLC | Arpico Insurance vs. Ceylon Tobacco | Arpico Insurance vs. Lighthouse Hotel 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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