Correlation Between SINCLAIRS HOTELS and Digjam

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

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

Diversification Opportunities for SINCLAIRS HOTELS and Digjam

0.33

Correlation Coefficient

SINCLAIRS HOTELS  Digjam

Weak diversification

The 3 months correlation between SINCLAIRS and Digjam is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SINCLAIRS HOTELS ORD and Digjam Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digjam Limited and SINCLAIRS 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 SINCLAIRS HOTELS ORD are associated (or correlated) with Digjam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digjam Limited has no effect on the direction of SINCLAIRS HOTELS i.e., SINCLAIRS HOTELS and Digjam go up and down completely randomly.

Pair Corralation between SINCLAIRS HOTELS and Digjam

Assuming the 90 days trading horizon SINCLAIRS HOTELS ORD is expected to under-perform the Digjam. But the stock apears to be less risky and, when comparing its historical volatility, SINCLAIRS HOTELS ORD is 1.0 times less risky than Digjam. The stock trades about -0.01 of its potential returns per unit of risk. The Digjam Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  8,650  in Digjam Limited on September 4, 2024 and sell it today you would lose (139.00) from holding Digjam Limited or give up 1.61% of portfolio value over 90 days.

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

SINCLAIRS HOTELS ORD  vs.  Digjam Limited

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.

Digjam Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SINCLAIRS HOTELS and Digjam

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

The idea behind SINCLAIRS HOTELS ORD and Digjam Limited 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.