Correlation Between Kandy Hotels and Trans Asia
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By analyzing existing cross correlation between Kandy Hotels and Trans Asia Hotels, you can compare the effects of market volatilities on Kandy Hotels and Trans Asia 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 Kandy Hotels with a short position of Trans Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandy Hotels and Trans Asia.
Diversification Opportunities for Kandy Hotels and Trans Asia
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kandy and Trans is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kandy Hotels and Trans Asia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trans Asia Hotels and Kandy 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 Kandy Hotels are associated (or correlated) with Trans Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trans Asia Hotels has no effect on the direction of Kandy Hotels i.e., Kandy Hotels and Trans Asia go up and down completely randomly.
Pair Corralation between Kandy Hotels and Trans Asia
Assuming the 90 days trading horizon Kandy Hotels is expected to generate 1.26 times more return on investment than Trans Asia. However, Kandy Hotels is 1.26 times more volatile than Trans Asia Hotels. It trades about 0.04 of its potential returns per unit of risk. Trans Asia Hotels is currently generating about 0.01 per unit of risk. If you would invest 720.00 in Kandy Hotels on August 31, 2024 and sell it today you would earn a total of 230.00 from holding Kandy Hotels or generate 31.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.82% |
| Values | Daily Returns |
Kandy Hotels vs. Trans Asia Hotels
Performance |
| Timeline |
| Kandy Hotels |
| Trans Asia Hotels |
Kandy Hotels and Trans Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandy Hotels and Trans Asia
The main advantage of trading using opposite Kandy Hotels and Trans Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandy Hotels position performs unexpectedly, Trans Asia 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 Trans Asia will offset losses from the drop in Trans Asia's long position.| Kandy Hotels vs. Ceylinco Insurance PLC | Kandy Hotels vs. HATTON NATIONAL BANK | Kandy Hotels vs. Softlogic Life Insurance | Kandy Hotels vs. Amana Bank |
| Trans Asia vs. Ceylon Guardian Investment | Trans Asia vs. Browns Beach Hotels | Trans Asia vs. Galadari Hotels Lanka | Trans Asia vs. Lanka Milk Foods |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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