Correlation Between Palm Garden and Lighthouse Hotel
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By analyzing existing cross correlation between Palm Garden Hotels and Lighthouse Hotel PLC, you can compare the effects of market volatilities on Palm Garden and Lighthouse Hotel 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 Palm Garden with a short position of Lighthouse Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palm Garden and Lighthouse Hotel.
Diversification Opportunities for Palm Garden and Lighthouse Hotel
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Palm and Lighthouse is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Palm Garden Hotels and Lighthouse Hotel PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lighthouse Hotel PLC and Palm Garden 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 Palm Garden Hotels are associated (or correlated) with Lighthouse Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lighthouse Hotel PLC has no effect on the direction of Palm Garden i.e., Palm Garden and Lighthouse Hotel go up and down completely randomly.
Pair Corralation between Palm Garden and Lighthouse Hotel
Assuming the 90 days trading horizon Palm Garden Hotels is expected to under-perform the Lighthouse Hotel. In addition to that, Palm Garden is 1.01 times more volatile than Lighthouse Hotel PLC. It trades about -0.01 of its total potential returns per unit of risk. Lighthouse Hotel PLC is currently generating about 0.05 per unit of volatility. If you would invest 3,340 in Lighthouse Hotel PLC on August 27, 2024 and sell it today you would earn a total of 1,960 from holding Lighthouse Hotel PLC or generate 58.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.0% |
| Values | Daily Returns |
Palm Garden Hotels vs. Lighthouse Hotel PLC
Performance |
| Timeline |
| Palm Garden Hotels |
| Lighthouse Hotel PLC |
Palm Garden and Lighthouse Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palm Garden and Lighthouse Hotel
The main advantage of trading using opposite Palm Garden and Lighthouse Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palm Garden position performs unexpectedly, Lighthouse Hotel 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 Lighthouse Hotel will offset losses from the drop in Lighthouse Hotel's long position.| Palm Garden vs. SEYLAN BANK PLC | Palm Garden vs. Union Bank | Palm Garden vs. COMMERCIAL BANK OF | Palm Garden vs. Janashakthi Insurance |
| Lighthouse Hotel vs. Ceylon Guardian Investment | Lighthouse Hotel vs. Sri Lanka Telecom | Lighthouse Hotel vs. Ceylon Hotels | Lighthouse Hotel 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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