Correlation Between Lighthouse Hotel and Palm Garden
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By analyzing existing cross correlation between Lighthouse Hotel PLC and Palm Garden Hotels, you can compare the effects of market volatilities on Lighthouse Hotel and Palm Garden 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 Lighthouse Hotel with a short position of Palm Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lighthouse Hotel and Palm Garden.
Diversification Opportunities for Lighthouse Hotel and Palm Garden
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lighthouse and Palm is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lighthouse Hotel PLC and Palm Garden Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palm Garden Hotels and Lighthouse Hotel 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 Lighthouse Hotel PLC are associated (or correlated) with Palm Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palm Garden Hotels has no effect on the direction of Lighthouse Hotel i.e., Lighthouse Hotel and Palm Garden go up and down completely randomly.
Pair Corralation between Lighthouse Hotel and Palm Garden
Assuming the 90 days trading horizon Lighthouse Hotel PLC is expected to generate 1.66 times more return on investment than Palm Garden. However, Lighthouse Hotel is 1.66 times more volatile than Palm Garden Hotels. It trades about 0.27 of its potential returns per unit of risk. Palm Garden Hotels is currently generating about 0.27 per unit of risk. If you would invest 4,790 in Lighthouse Hotel PLC on August 31, 2024 and sell it today you would earn a total of 710.00 from holding Lighthouse Hotel PLC or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Lighthouse Hotel PLC vs. Palm Garden Hotels
Performance |
| Timeline |
| Lighthouse Hotel PLC |
| Palm Garden Hotels |
Lighthouse Hotel and Palm Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lighthouse Hotel and Palm Garden
The main advantage of trading using opposite Lighthouse Hotel and Palm Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lighthouse Hotel position performs unexpectedly, Palm Garden 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 Palm Garden will offset losses from the drop in Palm Garden's long position.| Lighthouse Hotel vs. Lion Brewery Ceylon | Lighthouse Hotel vs. Amana Bank | Lighthouse Hotel vs. Lanka Milk Foods | Lighthouse Hotel vs. Renuka Agri Foods |
| Palm Garden vs. Pegasus Hotels of | Palm Garden vs. Peoples Insurance PLC | Palm Garden vs. Sigiriya Village Hotels | Palm Garden vs. Lanka Realty Investments |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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