Correlation Between LEGEND INTERNET and TRANSCORP HOTELS

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Can any of the company-specific risk be diversified away by investing in both LEGEND INTERNET and TRANSCORP HOTELS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LEGEND INTERNET and TRANSCORP HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEGEND INTERNET and TRANSCORP HOTELS PLC, you can compare the effects of market volatilities on LEGEND INTERNET and TRANSCORP HOTELS 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 LEGEND INTERNET with a short position of TRANSCORP HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEGEND INTERNET and TRANSCORP HOTELS.

Diversification Opportunities for LEGEND INTERNET and TRANSCORP HOTELS

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between LEGEND and TRANSCORP is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding LEGEND INTERNET and TRANSCORP HOTELS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSCORP HOTELS PLC and LEGEND INTERNET 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 LEGEND INTERNET are associated (or correlated) with TRANSCORP HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSCORP HOTELS PLC has no effect on the direction of LEGEND INTERNET i.e., LEGEND INTERNET and TRANSCORP HOTELS go up and down completely randomly.

Pair Corralation between LEGEND INTERNET and TRANSCORP HOTELS

Assuming the 90 days trading horizon LEGEND INTERNET is expected to under-perform the TRANSCORP HOTELS. In addition to that, LEGEND INTERNET is 2.44 times more volatile than TRANSCORP HOTELS PLC. It trades about 0.0 of its total potential returns per unit of risk. TRANSCORP HOTELS PLC is currently generating about 0.05 per unit of volatility. If you would invest  16,460  in TRANSCORP HOTELS PLC on September 7, 2025 and sell it today you would earn a total of  820.00  from holding TRANSCORP HOTELS PLC or generate 4.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

LEGEND INTERNET  vs.  TRANSCORP HOTELS PLC

 Performance 
       Timeline  
LEGEND INTERNET 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days LEGEND INTERNET has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, LEGEND INTERNET is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
TRANSCORP HOTELS PLC 

Risk-Adjusted Performance

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in TRANSCORP HOTELS PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, TRANSCORP HOTELS is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

LEGEND INTERNET and TRANSCORP HOTELS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LEGEND INTERNET and TRANSCORP HOTELS

The main advantage of trading using opposite LEGEND INTERNET and TRANSCORP HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEGEND INTERNET position performs unexpectedly, TRANSCORP HOTELS 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 TRANSCORP HOTELS will offset losses from the drop in TRANSCORP HOTELS's long position.
The idea behind LEGEND INTERNET and TRANSCORP HOTELS PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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