Correlation Between SINCLAIRS HOTELS and Indian Card

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

Diversification Opportunities for SINCLAIRS HOTELS and Indian Card

0.73

Correlation Coefficient

SINCLAIRS HOTELS  Indian Card

Poor diversification

The 3 months correlation between SINCLAIRS and Indian is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SINCLAIRS HOTELS ORD and Indian Card Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Card Clothing 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 Indian Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Card Clothing has no effect on the direction of SINCLAIRS HOTELS i.e., SINCLAIRS HOTELS and Indian Card go up and down completely randomly.

Pair Corralation between SINCLAIRS HOTELS and Indian Card

Assuming the 90 days trading horizon SINCLAIRS HOTELS ORD is expected to under-perform the Indian Card. In addition to that, SINCLAIRS HOTELS is 1.12 times more volatile than Indian Card Clothing. It trades about -0.19 of its total potential returns per unit of risk. Indian Card Clothing is currently generating about -0.11 per unit of volatility. If you would invest  34,680  in Indian Card Clothing on October 23, 2024 and sell it today you would lose (2,635) from holding Indian Card Clothing or give up 7.6% 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.  Indian Card Clothing

SINCLAIRS HOTELS ORD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SINCLAIRS HOTELS ORD are ranked lower than 8 (%) 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.

Indian Card Clothing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indian Card Clothing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Indian Card exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SINCLAIRS HOTELS and Indian Card

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

The idea behind SINCLAIRS HOTELS ORD and Indian Card Clothing 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.