Correlation Between SINCLAIRS HOTELS and Zaggle Prepaid

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

Diversification Opportunities for SINCLAIRS HOTELS and Zaggle Prepaid

0.85

Correlation Coefficient

SINCLAIRS HOTELS  Zaggle Prepaid

Very poor diversification

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

Pair Corralation between SINCLAIRS HOTELS and Zaggle Prepaid

Assuming the 90 days trading horizon SINCLAIRS HOTELS is expected to generate 2.28 times less return on investment than Zaggle Prepaid. In addition to that, SINCLAIRS HOTELS is 1.15 times more volatile than Zaggle Prepaid Ocean. It trades about 0.04 of its total potential returns per unit of risk. Zaggle Prepaid Ocean is currently generating about 0.12 per unit of volatility. If you would invest  42,840  in Zaggle Prepaid Ocean on October 15, 2024 and sell it today you would earn a total of  9,140  from holding Zaggle Prepaid Ocean or generate 21.34% return on investment over 90 days.

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

SINCLAIRS HOTELS ORD  vs.  Zaggle Prepaid Ocean

SINCLAIRS HOTELS ORD

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SINCLAIRS HOTELS ORD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, SINCLAIRS HOTELS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Zaggle Prepaid Ocean

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zaggle Prepaid Ocean are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Zaggle Prepaid sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SINCLAIRS HOTELS and Zaggle Prepaid

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

The idea behind SINCLAIRS HOTELS ORD and Zaggle Prepaid Ocean 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.