Correlation Between IKEJA HOTELS and TRANSCORP HOTELS
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By analyzing existing cross correlation between IKEJA HOTELS PLC and TRANSCORP HOTELS PLC, you can compare the effects of market volatilities on IKEJA HOTELS and TRANSCORP 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 IKEJA HOTELS with a short position of TRANSCORP HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of IKEJA HOTELS and TRANSCORP HOTELS.
Diversification Opportunities for IKEJA HOTELS and TRANSCORP HOTELS
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IKEJA and TRANSCORP is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding IKEJA HOTELS PLC and TRANSCORP HOTELS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSCORP HOTELS PLC and IKEJA 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 IKEJA HOTELS PLC are associated (or correlated) with TRANSCORP HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSCORP HOTELS PLC has no effect on the direction of IKEJA HOTELS i.e., IKEJA HOTELS and TRANSCORP HOTELS go up and down completely randomly.
Pair Corralation between IKEJA HOTELS and TRANSCORP HOTELS
Assuming the 90 days trading horizon IKEJA HOTELS is expected to generate 1.14 times less return on investment than TRANSCORP HOTELS. In addition to that, IKEJA HOTELS is 1.62 times more volatile than TRANSCORP HOTELS PLC. It trades about 0.12 of its total potential returns per unit of risk. TRANSCORP HOTELS PLC is currently generating about 0.22 per unit of volatility. If you would invest 625.00 in TRANSCORP HOTELS PLC on August 24, 2024 and sell it today you would earn a total of 9,975 from holding TRANSCORP HOTELS PLC or generate 1596.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IKEJA HOTELS PLC vs. TRANSCORP HOTELS PLC
Performance |
| Timeline |
| IKEJA HOTELS PLC |
| TRANSCORP HOTELS PLC |
IKEJA HOTELS and TRANSCORP HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IKEJA HOTELS and TRANSCORP HOTELS
The main advantage of trading using opposite IKEJA HOTELS and TRANSCORP HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IKEJA HOTELS position performs unexpectedly, TRANSCORP 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 TRANSCORP HOTELS will offset losses from the drop in TRANSCORP HOTELS's long position.| IKEJA HOTELS vs. INTERNATIONAL ENERGY INSURANCE | IKEJA HOTELS vs. VETIVA SUMER GOODS | IKEJA HOTELS vs. CONSOLIDATED HALLMARK INSURANCE | IKEJA HOTELS vs. ABC TRANSPORT PLC |
| TRANSCORP HOTELS vs. GUINEA INSURANCE PLC | TRANSCORP HOTELS vs. SECURE ELECTRONIC TECHNOLOGY | TRANSCORP HOTELS vs. IKEJA HOTELS PLC | TRANSCORP HOTELS vs. AFROMEDIA PLC |
Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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