Correlation Between Tal Lanka and Pan Asia
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By analyzing existing cross correlation between Tal Lanka Hotels and Pan Asia Banking, you can compare the effects of market volatilities on Tal Lanka and Pan 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 Tal Lanka with a short position of Pan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tal Lanka and Pan Asia.
Diversification Opportunities for Tal Lanka and Pan Asia
Poor diversification
The 3 months correlation between Tal and Pan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tal Lanka Hotels and Pan Asia Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Asia Banking 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 Pan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Asia Banking has no effect on the direction of Tal Lanka i.e., Tal Lanka and Pan Asia go up and down completely randomly.
Pair Corralation between Tal Lanka and Pan Asia
Assuming the 90 days trading horizon Tal Lanka is expected to generate 2.21 times less return on investment than Pan Asia. In addition to that, Tal Lanka is 1.56 times more volatile than Pan Asia Banking. It trades about 0.03 of its total potential returns per unit of risk. Pan Asia Banking is currently generating about 0.09 per unit of volatility. If you would invest 1,950 in Pan Asia Banking on September 4, 2024 and sell it today you would earn a total of 750.00 from holding Pan Asia Banking or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.56% |
| Values | Daily Returns |
Tal Lanka Hotels vs. Pan Asia Banking
Performance |
| Timeline |
| Tal Lanka Hotels |
| Pan Asia Banking |
Tal Lanka and Pan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tal Lanka and Pan Asia
The main advantage of trading using opposite Tal Lanka and Pan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tal Lanka position performs unexpectedly, Pan 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 Pan Asia will offset losses from the drop in Pan Asia's long position.| Tal Lanka vs. Amaya Leisure PLC | Tal Lanka vs. SERENDIB HOTELS PLC | Tal Lanka vs. Lion Brewery Ceylon | Tal Lanka vs. Galadari Hotels Lanka |
| Pan Asia vs. Lion Brewery Ceylon | Pan Asia vs. COMMERCIAL BANK OF | Pan Asia vs. Ceylon Beverage Holdings | Pan Asia vs. Amana Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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