Correlation Between SUNBIRD HOTELS and BLANTYRE HOTELS

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

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

Diversification Opportunities for SUNBIRD HOTELS and BLANTYRE HOTELS

-0.31

Correlation Coefficient

SUNBIRD HOTELS  BLANTYRE HOTELS

Very good diversification

The 3 months correlation between SUNBIRD and BLANTYRE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SUNBIRD HOTELS TOURISM and BLANTYRE HOTELS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLANTYRE HOTELS and SUNBIRD 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 SUNBIRD HOTELS TOURISM are associated (or correlated) with BLANTYRE HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLANTYRE HOTELS has no effect on the direction of SUNBIRD HOTELS i.e., SUNBIRD HOTELS and BLANTYRE HOTELS go up and down completely randomly.

Pair Corralation between SUNBIRD HOTELS and BLANTYRE HOTELS

If you would invest  24,008  in SUNBIRD HOTELS TOURISM on December 30, 2024 and sell it today you would earn a total of  6,006  from holding SUNBIRD HOTELS TOURISM or generate 25.02% return on investment over 90 days.

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

SUNBIRD HOTELS TOURISM  vs.  BLANTYRE HOTELS LIMITED

SUNBIRD HOTELS TOURISM

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SUNBIRD HOTELS TOURISM are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, SUNBIRD HOTELS exhibited solid returns over the last few months and may actually be approaching a breakup point.

BLANTYRE HOTELS

Risk-Adjusted Performance

Very Weak

Over the last 90 days BLANTYRE HOTELS LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, BLANTYRE HOTELS is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SUNBIRD HOTELS and BLANTYRE HOTELS

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

The idea behind SUNBIRD HOTELS TOURISM and BLANTYRE HOTELS 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.