Correlation Between SINCLAIRS HOTELS and IdeaForge Technology

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

Diversification Opportunities for SINCLAIRS HOTELS and IdeaForge Technology

0.85

Correlation Coefficient

SINCLAIRS HOTELS  IdeaForge Technology

Very poor diversification

The 3 months correlation between SINCLAIRS and IdeaForge is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SINCLAIRS HOTELS ORD and ideaForge Technology Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ideaForge Technology 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 IdeaForge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ideaForge Technology has no effect on the direction of SINCLAIRS HOTELS i.e., SINCLAIRS HOTELS and IdeaForge Technology go up and down completely randomly.

Pair Corralation between SINCLAIRS HOTELS and IdeaForge Technology

Assuming the 90 days trading horizon SINCLAIRS HOTELS ORD is expected to generate 1.4 times more return on investment than IdeaForge Technology. However, SINCLAIRS HOTELS is 1.4 times more volatile than ideaForge Technology Limited. It trades about -0.11 of its potential returns per unit of risk. ideaForge Technology Limited is currently generating about -0.27 per unit of risk. If you would invest  10,607  in SINCLAIRS HOTELS ORD on December 1, 2024 and sell it today you would lose (2,784) from holding SINCLAIRS HOTELS ORD or give up 26.25% of portfolio value over 90 days.

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

SINCLAIRS HOTELS ORD  vs.  ideaForge Technology 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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ideaForge Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days ideaForge Technology Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SINCLAIRS HOTELS and IdeaForge Technology

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

The idea behind SINCLAIRS HOTELS ORD and ideaForge Technology 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.