Correlation Between Peoples Insurance and Eden Hotel
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By analyzing existing cross correlation between Peoples Insurance PLC and Eden Hotel Lanka, you can compare the effects of market volatilities on Peoples Insurance and Eden 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 Peoples Insurance with a short position of Eden Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Eden Hotel.
Diversification Opportunities for Peoples Insurance and Eden Hotel
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Peoples and Eden is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance PLC and Eden Hotel Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eden Hotel Lanka and Peoples Insurance 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 Peoples Insurance PLC are associated (or correlated) with Eden Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eden Hotel Lanka has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Eden Hotel go up and down completely randomly.
Pair Corralation between Peoples Insurance and Eden Hotel
Assuming the 90 days trading horizon Peoples Insurance PLC is expected to under-perform the Eden Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Peoples Insurance PLC is 1.63 times less risky than Eden Hotel. The stock trades about -0.21 of its potential returns per unit of risk. The Eden Hotel Lanka is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,380 in Eden Hotel Lanka on August 31, 2024 and sell it today you would earn a total of 80.00 from holding Eden Hotel Lanka or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Insurance PLC vs. Eden Hotel Lanka
Performance |
| Timeline |
| Peoples Insurance PLC |
| Eden Hotel Lanka |
Peoples Insurance and Eden Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and Eden Hotel
The main advantage of trading using opposite Peoples Insurance and Eden Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, Eden 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 Eden Hotel will offset losses from the drop in Eden Hotel's long position.| Peoples Insurance vs. HDFC Bank of | Peoples Insurance vs. Nations Trust Bank | Peoples Insurance vs. RENUKA FOODS PLC | Peoples Insurance vs. Carson Cumberbatch PLC |
| Eden Hotel vs. Janashakthi Insurance | Eden Hotel vs. CEYLON HOSPITALS PLC | Eden Hotel vs. BROWNS INVESTMENTS PLC | Eden Hotel vs. Sampath Bank PLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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