Correlation Between Palm Garden and Tal Lanka
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By analyzing existing cross correlation between Palm Garden Hotels and Tal Lanka Hotels, you can compare the effects of market volatilities on Palm Garden and Tal Lanka 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 Palm Garden with a short position of Tal Lanka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palm Garden and Tal Lanka.
Diversification Opportunities for Palm Garden and Tal Lanka
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Palm and Tal is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Palm Garden Hotels and Tal Lanka Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tal Lanka Hotels and Palm Garden 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 Palm Garden Hotels are associated (or correlated) with Tal Lanka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tal Lanka Hotels has no effect on the direction of Palm Garden i.e., Palm Garden and Tal Lanka go up and down completely randomly.
Pair Corralation between Palm Garden and Tal Lanka
Assuming the 90 days trading horizon Palm Garden is expected to generate 1.19 times less return on investment than Tal Lanka. But when comparing it to its historical volatility, Palm Garden Hotels is 1.36 times less risky than Tal Lanka. It trades about 0.13 of its potential returns per unit of risk. Tal Lanka Hotels is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,690 in Tal Lanka Hotels on August 30, 2024 and sell it today you would earn a total of 310.00 from holding Tal Lanka Hotels or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palm Garden Hotels vs. Tal Lanka Hotels
Performance |
| Timeline |
| Palm Garden Hotels |
| Tal Lanka Hotels |
Palm Garden and Tal Lanka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palm Garden and Tal Lanka
The main advantage of trading using opposite Palm Garden and Tal Lanka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palm Garden position performs unexpectedly, Tal Lanka 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 Tal Lanka will offset losses from the drop in Tal Lanka's long position.| Palm Garden vs. Pegasus Hotels of | Palm Garden vs. Peoples Insurance PLC | Palm Garden vs. Sigiriya Village Hotels | Palm Garden vs. Lanka Realty Investments |
| Tal Lanka vs. Galadari Hotels Lanka | Tal Lanka vs. Hotel Sigiriya PLC | Tal Lanka vs. SERENDIB HOTELS PLC | Tal Lanka vs. Singhe Hospitals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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