Correlation Between Nuwara Eliya and Galadari Hotels
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By analyzing existing cross correlation between Nuwara Eliya Hotels and Galadari Hotels Lanka, you can compare the effects of market volatilities on Nuwara Eliya and Galadari 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 Nuwara Eliya with a short position of Galadari Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuwara Eliya and Galadari Hotels.
Diversification Opportunities for Nuwara Eliya and Galadari Hotels
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuwara and Galadari is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nuwara Eliya Hotels and Galadari Hotels Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galadari Hotels Lanka 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 Galadari Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galadari Hotels Lanka has no effect on the direction of Nuwara Eliya i.e., Nuwara Eliya and Galadari Hotels go up and down completely randomly.
Pair Corralation between Nuwara Eliya and Galadari Hotels
Assuming the 90 days trading horizon Nuwara Eliya Hotels is expected to generate 2.58 times more return on investment than Galadari Hotels. However, Nuwara Eliya is 2.58 times more volatile than Galadari Hotels Lanka. It trades about 0.29 of its potential returns per unit of risk. Galadari Hotels Lanka is currently generating about 0.19 per unit of risk. If you would invest 196,000 in Nuwara Eliya Hotels on August 31, 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 | 60.0% |
| Values | Daily Returns |
Nuwara Eliya Hotels vs. Galadari Hotels Lanka
Performance |
| Timeline |
| Nuwara Eliya Hotels |
| Galadari Hotels Lanka |
Nuwara Eliya and Galadari Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuwara Eliya and Galadari Hotels
The main advantage of trading using opposite Nuwara Eliya and Galadari Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuwara Eliya position performs unexpectedly, Galadari 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 Galadari Hotels will offset losses from the drop in Galadari Hotels' long position.| Nuwara Eliya vs. Asian Hotels and | Nuwara Eliya vs. HVA Foods PLC | Nuwara Eliya vs. Palm Garden Hotels | Nuwara Eliya vs. Distilleries Company of |
| Galadari Hotels vs. HNB Finance | Galadari Hotels vs. Prime Lands Residencies | Galadari Hotels vs. Jat Holdings PLC | Galadari Hotels vs. E M L |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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