Correlation Between SINCLAIRS HOTELS and Gallantt Ispat

Can any of the company-specific risk be diversified away by investing in both SINCLAIRS HOTELS and Gallantt Ispat 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 Gallantt Ispat 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 Gallantt Ispat Limited, you can compare the effects of market volatilities on SINCLAIRS HOTELS and Gallantt Ispat 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 Gallantt Ispat. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINCLAIRS HOTELS and Gallantt Ispat.

Diversification Opportunities for SINCLAIRS HOTELS and Gallantt Ispat

0.62

Correlation Coefficient

SINCLAIRS HOTELS  Gallantt Ispat

Poor diversification

The 3 months correlation between SINCLAIRS and Gallantt is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SINCLAIRS HOTELS ORD and Gallantt Ispat Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gallantt Ispat 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 Gallantt Ispat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gallantt Ispat has no effect on the direction of SINCLAIRS HOTELS i.e., SINCLAIRS HOTELS and Gallantt Ispat go up and down completely randomly.

Pair Corralation between SINCLAIRS HOTELS and Gallantt Ispat

Assuming the 90 days trading horizon SINCLAIRS HOTELS ORD is expected to under-perform the Gallantt Ispat. In addition to that, SINCLAIRS HOTELS is 1.39 times more volatile than Gallantt Ispat Limited. It trades about -0.07 of its total potential returns per unit of risk. Gallantt Ispat Limited is currently generating about -0.03 per unit of volatility. If you would invest  34,685  in Gallantt Ispat Limited on November 29, 2024 and sell it today you would lose (2,510) from holding Gallantt Ispat Limited or give up 7.24% of portfolio value over 90 days.

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

SINCLAIRS HOTELS ORD  vs.  Gallantt Ispat Limited

SINCLAIRS HOTELS ORD

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Gallantt Ispat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gallantt Ispat Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gallantt Ispat is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SINCLAIRS HOTELS and Gallantt Ispat

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

The idea behind SINCLAIRS HOTELS ORD and Gallantt Ispat 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.