Correlation Between Browns Beach and Galadari Hotels
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By analyzing existing cross correlation between Browns Beach Hotels and Galadari Hotels Lanka, you can compare the effects of market volatilities on Browns Beach and Galadari 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 Browns Beach with a short position of Galadari Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Browns Beach and Galadari Hotels.
Diversification Opportunities for Browns Beach and Galadari Hotels
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Browns and Galadari is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Browns Beach Hotels and Galadari Hotels Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galadari Hotels Lanka and Browns Beach 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 Browns Beach Hotels are associated (or correlated) with Galadari Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galadari Hotels Lanka has no effect on the direction of Browns Beach i.e., Browns Beach and Galadari Hotels go up and down completely randomly.
Pair Corralation between Browns Beach and Galadari Hotels
Assuming the 90 days trading horizon Browns Beach Hotels is expected to generate 1.46 times more return on investment than Galadari Hotels. However, Browns Beach is 1.46 times more volatile than Galadari Hotels Lanka. It trades about 0.2 of its potential returns per unit of risk. Galadari Hotels Lanka is currently generating about 0.14 per unit of risk. If you would invest 1,300 in Browns Beach Hotels on September 15, 2024 and sell it today you would earn a total of 550.00 from holding Browns Beach Hotels or generate 42.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.33% |
Values | Daily Returns |
Browns Beach Hotels vs. Galadari Hotels Lanka
Performance |
Timeline |
Browns Beach Hotels |
Galadari Hotels Lanka |
Browns Beach and Galadari Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Browns Beach and Galadari Hotels
The main advantage of trading using opposite Browns Beach and Galadari Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Browns Beach position performs unexpectedly, Galadari 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 Galadari Hotels will offset losses from the drop in Galadari Hotels' long position.Browns Beach vs. Lanka Credit and | Browns Beach vs. VIDULLANKA PLC | Browns Beach vs. Carson Cumberbatch PLC | Browns Beach vs. Peoples Insurance PLC |
Galadari Hotels vs. Lanka Credit and | Galadari Hotels vs. VIDULLANKA PLC | Galadari Hotels vs. Carson Cumberbatch PLC | Galadari Hotels vs. Peoples 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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