Correlation Between Tal Lanka and Commercial Credit
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By analyzing existing cross correlation between Tal Lanka Hotels and Commercial Credit and, you can compare the effects of market volatilities on Tal Lanka and Commercial Credit 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 Tal Lanka with a short position of Commercial Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tal Lanka and Commercial Credit.
Diversification Opportunities for Tal Lanka and Commercial Credit
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tal and Commercial is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tal Lanka Hotels and Commercial Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Credit and Tal Lanka 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 Tal Lanka Hotels are associated (or correlated) with Commercial Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Credit has no effect on the direction of Tal Lanka i.e., Tal Lanka and Commercial Credit go up and down completely randomly.
Pair Corralation between Tal Lanka and Commercial Credit
Assuming the 90 days trading horizon Tal Lanka is expected to generate 1.48 times less return on investment than Commercial Credit. But when comparing it to its historical volatility, Tal Lanka Hotels is 1.05 times less risky than Commercial Credit. It trades about 0.2 of its potential returns per unit of risk. Commercial Credit and is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,970 in Commercial Credit and on August 27, 2024 and sell it today you would earn a total of 460.00 from holding Commercial Credit and or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tal Lanka Hotels vs. Commercial Credit and
Performance |
| Timeline |
| Tal Lanka Hotels |
| Commercial Credit |
Tal Lanka and Commercial Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tal Lanka and Commercial Credit
The main advantage of trading using opposite Tal Lanka and Commercial Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tal Lanka position performs unexpectedly, Commercial Credit 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 Commercial Credit will offset losses from the drop in Commercial Credit's long position.| Tal Lanka vs. BROWNS INVESTMENTS PLC | Tal Lanka vs. Tangerine Beach Hotels | Tal Lanka vs. Ceylon Guardian Investment | Tal Lanka vs. Lanka Realty Investments |
| Commercial Credit vs. John Keells Hotels | Commercial Credit vs. Hotel Sigiriya PLC | Commercial Credit vs. Tal Lanka Hotels | Commercial Credit vs. Lighthouse Hotel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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