Correlation Between TRANSCORP HOTELS and NEM INSURANCE
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By analyzing existing cross correlation between TRANSCORP HOTELS PLC and NEM INSURANCE PLC, you can compare the effects of market volatilities on TRANSCORP HOTELS and NEM INSURANCE 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 TRANSCORP HOTELS with a short position of NEM INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRANSCORP HOTELS and NEM INSURANCE.
Diversification Opportunities for TRANSCORP HOTELS and NEM INSURANCE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TRANSCORP and NEM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding TRANSCORP HOTELS PLC and NEM INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEM INSURANCE PLC and TRANSCORP 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 TRANSCORP HOTELS PLC are associated (or correlated) with NEM INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEM INSURANCE PLC has no effect on the direction of TRANSCORP HOTELS i.e., TRANSCORP HOTELS and NEM INSURANCE go up and down completely randomly.
Pair Corralation between TRANSCORP HOTELS and NEM INSURANCE
Assuming the 90 days trading horizon TRANSCORP HOTELS is expected to generate 1.73 times less return on investment than NEM INSURANCE. But when comparing it to its historical volatility, TRANSCORP HOTELS PLC is 1.7 times less risky than NEM INSURANCE. It trades about 0.23 of its potential returns per unit of risk. NEM INSURANCE PLC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,100 in NEM INSURANCE PLC on October 25, 2024 and sell it today you would earn a total of 185.00 from holding NEM INSURANCE PLC or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRANSCORP HOTELS PLC vs. NEM INSURANCE PLC
Performance |
| Timeline |
| TRANSCORP HOTELS PLC |
| NEM INSURANCE PLC |
TRANSCORP HOTELS and NEM INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRANSCORP HOTELS and NEM INSURANCE
The main advantage of trading using opposite TRANSCORP HOTELS and NEM INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRANSCORP HOTELS position performs unexpectedly, NEM INSURANCE 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 NEM INSURANCE will offset losses from the drop in NEM INSURANCE's long position.| TRANSCORP HOTELS vs. GUINEA INSURANCE PLC | TRANSCORP HOTELS vs. SECURE ELECTRONIC TECHNOLOGY | TRANSCORP HOTELS vs. VETIVA BANKING ETF | TRANSCORP HOTELS vs. BUA FOODS PLC |
| NEM INSURANCE vs. GUINEA INSURANCE PLC | NEM INSURANCE vs. SECURE ELECTRONIC TECHNOLOGY | NEM INSURANCE vs. VETIVA BANKING ETF | NEM INSURANCE vs. BUA FOODS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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