Correlation Between Union Chemicals and Browns Beach
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By analyzing existing cross correlation between Union Chemicals Lanka and Browns Beach Hotels, you can compare the effects of market volatilities on Union Chemicals and Browns Beach 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 Union Chemicals with a short position of Browns Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Chemicals and Browns Beach.
Diversification Opportunities for Union Chemicals and Browns Beach
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Union and Browns is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Union Chemicals Lanka and Browns Beach Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Browns Beach Hotels and Union Chemicals 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 Union Chemicals Lanka are associated (or correlated) with Browns Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Browns Beach Hotels has no effect on the direction of Union Chemicals i.e., Union Chemicals and Browns Beach go up and down completely randomly.
Pair Corralation between Union Chemicals and Browns Beach
Assuming the 90 days trading horizon Union Chemicals is expected to generate 1182.38 times less return on investment than Browns Beach. But when comparing it to its historical volatility, Union Chemicals Lanka is 6.4 times less risky than Browns Beach. It trades about 0.0 of its potential returns per unit of risk. Browns Beach Hotels is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Browns Beach Hotels on August 27, 2024 and sell it today you would earn a total of 240.00 from holding Browns Beach Hotels or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Union Chemicals Lanka vs. Browns Beach Hotels
Performance |
| Timeline |
| Union Chemicals Lanka |
| Browns Beach Hotels |
Union Chemicals and Browns Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Chemicals and Browns Beach
The main advantage of trading using opposite Union Chemicals and Browns Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Chemicals position performs unexpectedly, Browns Beach 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 Browns Beach will offset losses from the drop in Browns Beach's long position.| Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. Singhe Hospitals | Union Chemicals vs. Lanka Realty Investments | Union Chemicals vs. RENUKA FOODS PLC |
| Browns Beach vs. Softlogic Life Insurance | Browns Beach vs. Nuwara Eliya Hotels | Browns Beach vs. John Keells Hotels | Browns Beach vs. CEYLINCO INSURANCE 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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