Correlation Between Pegasus Hotels and Kandy Hotels
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By analyzing existing cross correlation between Pegasus Hotels of and Kandy Hotels, you can compare the effects of market volatilities on Pegasus Hotels 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 Pegasus Hotels with a short position of Kandy Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pegasus Hotels and Kandy Hotels.
Diversification Opportunities for Pegasus Hotels and Kandy Hotels
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pegasus and Kandy is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pegasus Hotels of and Kandy Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandy Hotels and Pegasus Hotels 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 Pegasus Hotels of 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 Pegasus Hotels i.e., Pegasus Hotels and Kandy Hotels go up and down completely randomly.
Pair Corralation between Pegasus Hotels and Kandy Hotels
Assuming the 90 days trading horizon Pegasus Hotels of is expected to generate 1.24 times more return on investment than Kandy Hotels. However, Pegasus Hotels is 1.24 times more volatile than Kandy Hotels. It trades about 0.05 of its potential returns per unit of risk. Kandy Hotels is currently generating about 0.04 per unit of risk. If you would invest 2,660 in Pegasus Hotels of on August 31, 2024 and sell it today you would earn a total of 1,240 from holding Pegasus Hotels of or generate 46.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.82% |
| Values | Daily Returns |
Pegasus Hotels of vs. Kandy Hotels
Performance |
| Timeline |
| Pegasus Hotels |
| Kandy Hotels |
Pegasus Hotels and Kandy Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pegasus Hotels and Kandy Hotels
The main advantage of trading using opposite Pegasus Hotels and Kandy Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pegasus Hotels 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.| Pegasus Hotels vs. Lighthouse Hotel PLC | Pegasus Hotels vs. Hatton National Bank | Pegasus Hotels vs. Amana Bank | Pegasus Hotels vs. Galadari Hotels Lanka |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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