Correlation Between Advani Hotels and SINCLAIRS HOTELS

Can any of the company-specific risk be diversified away by investing in both Advani Hotels and SINCLAIRS HOTELS 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 Advani Hotels and SINCLAIRS HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advani Hotels Resorts and SINCLAIRS HOTELS ORD, you can compare the effects of market volatilities on Advani Hotels and SINCLAIRS 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 Advani Hotels with a short position of SINCLAIRS HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advani Hotels and SINCLAIRS HOTELS.

Diversification Opportunities for Advani Hotels and SINCLAIRS HOTELS

0.9

Correlation Coefficient

Advani Hotels  SINCLAIRS HOTELS

Almost no diversification

The 3 months correlation between Advani and SINCLAIRS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Advani Hotels Resorts and SINCLAIRS HOTELS ORD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINCLAIRS HOTELS ORD and Advani 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 Advani Hotels Resorts are associated (or correlated) with SINCLAIRS HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINCLAIRS HOTELS ORD has no effect on the direction of Advani Hotels i.e., Advani Hotels and SINCLAIRS HOTELS go up and down completely randomly.

Pair Corralation between Advani Hotels and SINCLAIRS HOTELS

Assuming the 90 days trading horizon Advani Hotels Resorts is expected to under-perform the SINCLAIRS HOTELS. But the stock apears to be less risky and, when comparing its historical volatility, Advani Hotels Resorts is 1.06 times less risky than SINCLAIRS HOTELS. The stock trades about -0.07 of its potential returns per unit of risk. The SINCLAIRS HOTELS ORD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  10,626  in SINCLAIRS HOTELS ORD on August 31, 2024 and sell it today you would lose (139.00) from holding SINCLAIRS HOTELS ORD or give up 1.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Advani Hotels Resorts  vs.  SINCLAIRS HOTELS ORD

Advani Hotels Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advani Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

SINCLAIRS HOTELS ORD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SINCLAIRS HOTELS ORD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, SINCLAIRS HOTELS is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Advani Hotels and SINCLAIRS HOTELS

The main advantage of trading using opposite Advani Hotels and SINCLAIRS HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advani Hotels position performs unexpectedly, SINCLAIRS 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 SINCLAIRS HOTELS will offset losses from the drop in SINCLAIRS HOTELS's long position.

The idea behind Advani Hotels Resorts and SINCLAIRS HOTELS ORD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.