Correlation Between Silver Ridge and Shangri La
Can any of the company-specific risk be diversified away by investing in both Silver Ridge and Shangri La at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Silver Ridge and Shangri La into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Ridge Holdings and Shangri La Hotels, you can compare the effects of market volatilities on Silver Ridge and Shangri La 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 Silver Ridge with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Ridge and Shangri La.
Diversification Opportunities for Silver Ridge and Shangri La
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Silver and Shangri is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Silver Ridge Holdings and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels and Silver Ridge 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 Silver Ridge Holdings are associated (or correlated) with Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of Silver Ridge i.e., Silver Ridge and Shangri La go up and down completely randomly.
Pair Corralation between Silver Ridge and Shangri La
Assuming the 90 days trading horizon Silver Ridge Holdings is expected to under-perform the Shangri La. In addition to that, Silver Ridge is 5.61 times more volatile than Shangri La Hotels. It trades about -0.21 of its total potential returns per unit of risk. Shangri La Hotels is currently generating about 0.07 per unit of volatility. If you would invest 201.00 in Shangri La Hotels on September 28, 2024 and sell it today you would earn a total of 3.00 from holding Shangri La Hotels or generate 1.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Silver Ridge Holdings vs. Shangri La Hotels
Performance |
Timeline |
Silver Ridge Holdings |
Shangri La Hotels |
Silver Ridge and Shangri La Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Silver Ridge and Shangri La
The main advantage of trading using opposite Silver Ridge and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Ridge position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.Silver Ridge vs. Malayan Banking Bhd | Silver Ridge vs. Public Bank Bhd | Silver Ridge vs. Petronas Chemicals Group | Silver Ridge vs. Tenaga Nasional Bhd |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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