Correlation Between SERENDIB HOTELS and Trans Asia
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By analyzing existing cross correlation between SERENDIB HOTELS PLC and Trans Asia Hotels, you can compare the effects of market volatilities on SERENDIB 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 SERENDIB HOTELS with a short position of Trans Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERENDIB HOTELS and Trans Asia.
Diversification Opportunities for SERENDIB HOTELS and Trans Asia
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SERENDIB and Trans is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SERENDIB HOTELS PLC 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 SERENDIB 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 SERENDIB HOTELS PLC 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 SERENDIB HOTELS i.e., SERENDIB HOTELS and Trans Asia go up and down completely randomly.
Pair Corralation between SERENDIB HOTELS and Trans Asia
Assuming the 90 days trading horizon SERENDIB HOTELS PLC is expected to generate 1.62 times more return on investment than Trans Asia. However, SERENDIB HOTELS is 1.62 times more volatile than Trans Asia Hotels. It trades about 0.36 of its potential returns per unit of risk. Trans Asia Hotels is currently generating about 0.13 per unit of risk. If you would invest 1,000.00 in SERENDIB HOTELS PLC on August 30, 2024 and sell it today you would earn a total of 160.00 from holding SERENDIB HOTELS PLC or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
SERENDIB HOTELS PLC vs. Trans Asia Hotels
Performance |
| Timeline |
| SERENDIB HOTELS PLC |
| Trans Asia Hotels |
SERENDIB HOTELS and Trans Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERENDIB HOTELS and Trans Asia
The main advantage of trading using opposite SERENDIB HOTELS and Trans Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERENDIB 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.| SERENDIB HOTELS vs. EX PACK RUGATED CARTONS | SERENDIB HOTELS vs. PANASIAN POWER PLC | SERENDIB HOTELS vs. Distilleries Company of | SERENDIB HOTELS vs. Palm Garden Hotels |
| Trans Asia vs. Eden Hotel Lanka | Trans Asia vs. Arpico Insurance | Trans Asia vs. Ceylon Guardian Investment | Trans Asia vs. SERENDIB HOTELS 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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