Correlation Between John Keells and Kandy Hotels
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By analyzing existing cross correlation between John Keells Hotels and Kandy Hotels, you can compare the effects of market volatilities on John Keells and Kandy Hotels 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 John Keells with a short position of Kandy Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Keells and Kandy Hotels.
Diversification Opportunities for John Keells and Kandy Hotels
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Kandy is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding John Keells Hotels and Kandy Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandy Hotels and John Keells 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 John Keells Hotels are associated (or correlated) with Kandy Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandy Hotels has no effect on the direction of John Keells i.e., John Keells and Kandy Hotels go up and down completely randomly.
Pair Corralation between John Keells and Kandy Hotels
Assuming the 90 days trading horizon John Keells is expected to generate 1.03 times less return on investment than Kandy Hotels. But when comparing it to its historical volatility, John Keells Hotels is 1.3 times less risky than Kandy Hotels. It trades about 0.2 of its potential returns per unit of risk. Kandy Hotels is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 790.00 in Kandy Hotels on August 31, 2024 and sell it today you would earn a total of 160.00 from holding Kandy Hotels or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.31% |
| Values | Daily Returns |
John Keells Hotels vs. Kandy Hotels
Performance |
| Timeline |
| John Keells Hotels |
| Kandy Hotels |
John Keells and Kandy Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Keells and Kandy Hotels
The main advantage of trading using opposite John Keells and Kandy Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Keells position performs unexpectedly, Kandy Hotels 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 Kandy Hotels will offset losses from the drop in Kandy Hotels' long position.| John Keells vs. Tangerine Beach Hotels | John Keells vs. BROWNS INVESTMENTS PLC | John Keells vs. Ceylon Hotels | John Keells vs. Sri Lanka Telecom |
| Kandy Hotels vs. Ceylinco Insurance PLC | Kandy Hotels vs. HATTON NATIONAL BANK | Kandy Hotels vs. Softlogic Life Insurance | Kandy Hotels vs. Amana Bank |
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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