Correlation Between Tangerine Beach and Mahaweli Reach
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By analyzing existing cross correlation between Tangerine Beach Hotels and Mahaweli Reach Hotel, you can compare the effects of market volatilities on Tangerine Beach and Mahaweli Reach 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 Tangerine Beach with a short position of Mahaweli Reach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tangerine Beach and Mahaweli Reach.
Diversification Opportunities for Tangerine Beach and Mahaweli Reach
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tangerine and Mahaweli is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tangerine Beach Hotels and Mahaweli Reach Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaweli Reach Hotel and Tangerine Beach 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 Tangerine Beach Hotels are associated (or correlated) with Mahaweli Reach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaweli Reach Hotel has no effect on the direction of Tangerine Beach i.e., Tangerine Beach and Mahaweli Reach go up and down completely randomly.
Pair Corralation between Tangerine Beach and Mahaweli Reach
Assuming the 90 days trading horizon Tangerine Beach is expected to generate 2.54 times less return on investment than Mahaweli Reach. But when comparing it to its historical volatility, Tangerine Beach Hotels is 2.24 times less risky than Mahaweli Reach. It trades about 0.24 of its potential returns per unit of risk. Mahaweli Reach Hotel is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,410 in Mahaweli Reach Hotel on August 31, 2024 and sell it today you would earn a total of 330.00 from holding Mahaweli Reach Hotel or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tangerine Beach Hotels vs. Mahaweli Reach Hotel
Performance |
| Timeline |
| Tangerine Beach Hotels |
| Mahaweli Reach Hotel |
Tangerine Beach and Mahaweli Reach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tangerine Beach and Mahaweli Reach
The main advantage of trading using opposite Tangerine Beach and Mahaweli Reach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tangerine Beach position performs unexpectedly, Mahaweli Reach 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 Mahaweli Reach will offset losses from the drop in Mahaweli Reach's long position.| Tangerine Beach vs. BROWNS INVESTMENTS PLC | Tangerine Beach vs. Keells Food Products | Tangerine Beach vs. Ceylon Guardian Investment | Tangerine Beach vs. RENUKA FOODS PLC |
| Mahaweli Reach vs. HNB Finance | Mahaweli Reach vs. Prime Lands Residencies | Mahaweli Reach vs. Jat Holdings PLC | Mahaweli Reach vs. E M L |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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