Correlation Between NEW MAURITIUS and SUN

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

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

Diversification Opportunities for NEW MAURITIUS and SUN

-0.16

Correlation Coefficient

NEW MAURITIUS  SUN

Good diversification

The 3 months correlation between NEW and SUN is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NEW MAURITIUS HOTELS and SUN LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN LIMITED and NEW MAURITIUS 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 NEW MAURITIUS HOTELS are associated (or correlated) with SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN LIMITED has no effect on the direction of NEW MAURITIUS i.e., NEW MAURITIUS and SUN go up and down completely randomly.

Pair Corralation between NEW MAURITIUS and SUN

Assuming the 90 days trading horizon NEW MAURITIUS HOTELS is expected to under-perform the SUN. But the stock apears to be less risky and, when comparing its historical volatility, NEW MAURITIUS HOTELS is 1.78 times less risky than SUN. The stock trades about -0.01 of its potential returns per unit of risk. The SUN LIMITED is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,545  in SUN LIMITED on April 25, 2025 and sell it today you would earn a total of  265.00  from holding SUN LIMITED or generate 7.48% return on investment over 90 days.

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

NEW MAURITIUS HOTELS  vs.  SUN LIMITED

NEW MAURITIUS HOTELS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEW MAURITIUS HOTELS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, NEW MAURITIUS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SUN LIMITED

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SUN LIMITED are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, SUN may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with NEW MAURITIUS and SUN

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

The idea behind NEW MAURITIUS HOTELS and SUN 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.