Correlation Between Union Chemicals and Tangerine Beach
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By analyzing existing cross correlation between Union Chemicals Lanka and Tangerine Beach Hotels, you can compare the effects of market volatilities on Union Chemicals and Tangerine Beach 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 Union Chemicals with a short position of Tangerine Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Chemicals and Tangerine Beach.
Diversification Opportunities for Union Chemicals and Tangerine Beach
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Union and Tangerine is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Union Chemicals Lanka and Tangerine Beach Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangerine Beach Hotels and Union Chemicals 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 Union Chemicals Lanka are associated (or correlated) with Tangerine Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangerine Beach Hotels has no effect on the direction of Union Chemicals i.e., Union Chemicals and Tangerine Beach go up and down completely randomly.
Pair Corralation between Union Chemicals and Tangerine Beach
Assuming the 90 days trading horizon Union Chemicals is expected to generate 459.88 times less return on investment than Tangerine Beach. But when comparing it to its historical volatility, Union Chemicals Lanka is 4.88 times less risky than Tangerine Beach. It trades about 0.0 of its potential returns per unit of risk. Tangerine Beach Hotels is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,010 in Tangerine Beach Hotels on August 28, 2024 and sell it today you would earn a total of 390.00 from holding Tangerine Beach Hotels or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Union Chemicals Lanka vs. Tangerine Beach Hotels
Performance |
| Timeline |
| Union Chemicals Lanka |
| Tangerine Beach Hotels |
Union Chemicals and Tangerine Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Chemicals and Tangerine Beach
The main advantage of trading using opposite Union Chemicals and Tangerine Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Chemicals position performs unexpectedly, Tangerine Beach 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 Tangerine Beach will offset losses from the drop in Tangerine Beach's long position.| Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. Singhe Hospitals | Union Chemicals vs. Lanka Realty Investments | Union Chemicals vs. RENUKA FOODS PLC |
| Tangerine Beach vs. BROWNS INVESTMENTS PLC | Tangerine Beach vs. Sampath Bank PLC | Tangerine Beach vs. RENUKA FOODS PLC | Tangerine Beach vs. SEYLAN BANK 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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