Correlation Between Future Retail and SINCLAIRS HOTELS

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

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

Diversification Opportunities for Future Retail and SINCLAIRS HOTELS

0.0

Correlation Coefficient

Future Retail  SINCLAIRS HOTELS

Pay attention - limited upside

The 3 months correlation between Future and SINCLAIRS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Future Retail Limited 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 Future Retail 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 Future Retail Limited 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 Future Retail i.e., Future Retail and SINCLAIRS HOTELS go up and down completely randomly.

Pair Corralation between Future Retail and SINCLAIRS HOTELS

Assuming the 90 days trading horizon Future Retail Limited is expected to under-perform the SINCLAIRS HOTELS. In addition to that, Future Retail is 1.08 times more volatile than SINCLAIRS HOTELS ORD. It trades about -0.04 of its total potential returns per unit of risk. SINCLAIRS HOTELS ORD is currently generating about -0.01 per unit of volatility. If you would invest  13,314  in SINCLAIRS HOTELS ORD on October 3, 2024 and sell it today you would lose (1,013) from holding SINCLAIRS HOTELS ORD or give up 7.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	41.28%
Values	Daily Returns

Future Retail Limited  vs.  SINCLAIRS HOTELS ORD

Future Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Future Retail is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

SINCLAIRS HOTELS ORD

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SINCLAIRS HOTELS ORD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, SINCLAIRS HOTELS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Future Retail and SINCLAIRS HOTELS

The main advantage of trading using opposite Future Retail and SINCLAIRS HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Retail 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 Future Retail Limited 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.