Correlation Between Tal Lanka and Trans Asia
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By analyzing existing cross correlation between Tal Lanka Hotels and Trans Asia Hotels, you can compare the effects of market volatilities on Tal Lanka 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 Tal Lanka with a short position of Trans Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tal Lanka and Trans Asia.
Diversification Opportunities for Tal Lanka and Trans Asia
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tal and Trans is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tal Lanka 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 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 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 Tal Lanka i.e., Tal Lanka and Trans Asia go up and down completely randomly.
Pair Corralation between Tal Lanka and Trans Asia
Assuming the 90 days trading horizon Tal Lanka Hotels is expected to generate 1.27 times more return on investment than Trans Asia. However, Tal Lanka is 1.27 times more volatile than Trans Asia Hotels. It trades about 0.06 of its potential returns per unit of risk. Trans Asia Hotels is currently generating about 0.04 per unit of risk. If you would invest 1,620 in Tal Lanka Hotels on August 27, 2024 and sell it today you would earn a total of 370.00 from holding Tal Lanka Hotels or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.58% |
| Values | Daily Returns |
Tal Lanka Hotels vs. Trans Asia Hotels
Performance |
| Timeline |
| Tal Lanka Hotels |
| Trans Asia Hotels |
Tal Lanka and Trans Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tal Lanka and Trans Asia
The main advantage of trading using opposite Tal Lanka and Trans Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tal Lanka 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.| Tal Lanka vs. Palm Garden Hotels | Tal Lanka vs. Carson Cumberbatch PLC | Tal Lanka vs. Browns Beach Hotels | Tal Lanka vs. Nuwara Eliya Hotels |
| Trans Asia vs. Hotel Sigiriya PLC | Trans Asia vs. BROWNS INVESTMENTS PLC | Trans Asia vs. SERENDIB HOTELS PLC | Trans Asia vs. Pegasus Hotels of |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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