Correlation Between INTERNATIONAL BREWERIES and TRANSCORP HOTELS
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By analyzing existing cross correlation between INTERNATIONAL BREWERIES PLC and TRANSCORP HOTELS PLC, you can compare the effects of market volatilities on INTERNATIONAL BREWERIES 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 INTERNATIONAL BREWERIES with a short position of TRANSCORP HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL BREWERIES and TRANSCORP HOTELS.
Diversification Opportunities for INTERNATIONAL BREWERIES and TRANSCORP HOTELS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INTERNATIONAL and TRANSCORP is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL BREWERIES 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 INTERNATIONAL BREWERIES 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 INTERNATIONAL BREWERIES 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 INTERNATIONAL BREWERIES i.e., INTERNATIONAL BREWERIES and TRANSCORP HOTELS go up and down completely randomly.
Pair Corralation between INTERNATIONAL BREWERIES and TRANSCORP HOTELS
Assuming the 90 days trading horizon INTERNATIONAL BREWERIES PLC is expected to generate 1.48 times more return on investment than TRANSCORP HOTELS. However, INTERNATIONAL BREWERIES is 1.48 times more volatile than TRANSCORP HOTELS PLC. It trades about 0.16 of its potential returns per unit of risk. TRANSCORP HOTELS PLC is currently generating about 0.18 per unit of risk. If you would invest 400.00 in INTERNATIONAL BREWERIES PLC on October 26, 2024 and sell it today you would earn a total of 100.00 from holding INTERNATIONAL BREWERIES PLC or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERNATIONAL BREWERIES PLC vs. TRANSCORP HOTELS PLC
Performance |
| Timeline |
| INTERNATIONAL BREWERIES |
| TRANSCORP HOTELS PLC |
INTERNATIONAL BREWERIES and TRANSCORP HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERNATIONAL BREWERIES and TRANSCORP HOTELS
The main advantage of trading using opposite INTERNATIONAL BREWERIES and TRANSCORP HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERNATIONAL BREWERIES 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.| INTERNATIONAL BREWERIES vs. STACO INSURANCE PLC | INTERNATIONAL BREWERIES vs. BUA FOODS PLC | INTERNATIONAL BREWERIES vs. NIGERIAN BREWERIES PLC | INTERNATIONAL BREWERIES vs. CHAMPION BREWERIES PLC |
| TRANSCORP HOTELS vs. UNION HOMES REAL | TRANSCORP HOTELS vs. FIDSON HEALTHCARE PLC | TRANSCORP HOTELS vs. DN TYRE RUBBER | TRANSCORP HOTELS vs. INTERNATIONAL BREWERIES 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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