Correlation Between Kandy Hotels and Peoples Insurance
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By analyzing existing cross correlation between Kandy Hotels and Peoples Insurance PLC, you can compare the effects of market volatilities on Kandy Hotels and Peoples 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 Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandy Hotels and Peoples Insurance.
Diversification Opportunities for Kandy Hotels and Peoples Insurance
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kandy and Peoples is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kandy Hotels and Peoples Insurance PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance 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 Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance PLC has no effect on the direction of Kandy Hotels i.e., Kandy Hotels and Peoples Insurance go up and down completely randomly.
Pair Corralation between Kandy Hotels and Peoples Insurance
Assuming the 90 days trading horizon Kandy Hotels is expected to generate 1.15 times more return on investment than Peoples Insurance. However, Kandy Hotels is 1.15 times more volatile than Peoples Insurance PLC. It trades about 0.18 of its potential returns per unit of risk. Peoples Insurance PLC is currently generating about 0.05 per unit of risk. If you would invest 820.00 in Kandy Hotels on August 28, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandy Hotels vs. Peoples Insurance PLC
Performance |
| Timeline |
| Kandy Hotels |
| Peoples Insurance PLC |
Kandy Hotels and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandy Hotels and Peoples Insurance
The main advantage of trading using opposite Kandy Hotels and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandy Hotels position performs unexpectedly, Peoples 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 Peoples Insurance will offset losses from the drop in Peoples 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 |
| Peoples Insurance vs. Ceylon Hospitals PLC | Peoples Insurance vs. Ceylon Guardian Investment | Peoples Insurance vs. Lanka Realty Investments | Peoples Insurance vs. Palm Garden Hotels |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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