Correlation Between Nuwara Eliya and Aitken Spence
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By analyzing existing cross correlation between Nuwara Eliya Hotels and Aitken Spence Hotel, you can compare the effects of market volatilities on Nuwara Eliya 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 Nuwara Eliya with a short position of Aitken Spence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuwara Eliya and Aitken Spence.
Diversification Opportunities for Nuwara Eliya and Aitken Spence
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuwara and Aitken is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nuwara Eliya 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 Nuwara Eliya 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 Nuwara Eliya 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 Nuwara Eliya i.e., Nuwara Eliya and Aitken Spence go up and down completely randomly.
Pair Corralation between Nuwara Eliya and Aitken Spence
Assuming the 90 days trading horizon Nuwara Eliya Hotels is expected to generate 2.83 times more return on investment than Aitken Spence. However, Nuwara Eliya is 2.83 times more volatile than Aitken Spence Hotel. It trades about 0.28 of its potential returns per unit of risk. Aitken Spence Hotel is currently generating about 0.2 per unit of risk. If you would invest 196,000 in Nuwara Eliya Hotels on August 30, 2024 and sell it today you would earn a total of 37,475 from holding Nuwara Eliya Hotels or generate 19.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Nuwara Eliya Hotels vs. Aitken Spence Hotel
Performance |
| Timeline |
| Nuwara Eliya Hotels |
| Aitken Spence Hotel |
Nuwara Eliya and Aitken Spence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuwara Eliya and Aitken Spence
The main advantage of trading using opposite Nuwara Eliya and Aitken Spence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuwara Eliya 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.| Nuwara Eliya vs. EX PACK RUGATED CARTONS | Nuwara Eliya vs. PANASIAN POWER PLC | Nuwara Eliya vs. Distilleries Company of | Nuwara Eliya vs. Palm Garden Hotels |
| Aitken Spence vs. EX PACK RUGATED CARTONS | Aitken Spence vs. PANASIAN POWER PLC | Aitken Spence vs. Distilleries Company of | Aitken Spence 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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