Correlation Between CONSOLIDATED HALLMARK and TRANSCORP HOTELS

Can any of the company-specific risk be diversified away by investing in both CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK and TRANSCORP HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CONSOLIDATED HALLMARK INSURANCE and TRANSCORP HOTELS PLC, you can compare the effects of market volatilities on CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK with a short position of TRANSCORP HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSOLIDATED HALLMARK and TRANSCORP HOTELS.

Diversification Opportunities for CONSOLIDATED HALLMARK and TRANSCORP HOTELS

-0.09

Correlation Coefficient

CONSOLIDATED HALLMARK  TRANSCORP HOTELS

Good diversification

The 3 months correlation between CONSOLIDATED and TRANSCORP is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding CONSOLIDATED HALLMARK INSURANC 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 CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK INSURANCE 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 CONSOLIDATED HALLMARK i.e., CONSOLIDATED HALLMARK and TRANSCORP HOTELS go up and down completely randomly.

Pair Corralation between CONSOLIDATED HALLMARK and TRANSCORP HOTELS

Assuming the 90 days trading horizon CONSOLIDATED HALLMARK INSURANCE is expected to generate 1.14 times more return on investment than TRANSCORP HOTELS. However, CONSOLIDATED HALLMARK is 1.14 times more volatile than TRANSCORP HOTELS PLC. It trades about 0.06 of its potential returns per unit of risk. TRANSCORP HOTELS PLC is currently generating about 0.03 per unit of risk. If you would invest  289.00  in CONSOLIDATED HALLMARK INSURANCE on May 3, 2025 and sell it today you would earn a total of  25.00  from holding CONSOLIDATED HALLMARK INSURANCE or generate 8.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

CONSOLIDATED HALLMARK INSURANC  vs.  TRANSCORP HOTELS PLC

CONSOLIDATED HALLMARK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED HALLMARK INSURANCE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, CONSOLIDATED HALLMARK may actually be approaching a critical reversion point that can send shares even higher in September 2025.

TRANSCORP HOTELS PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRANSCORP HOTELS PLC are ranked lower than 2 (%) 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 current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CONSOLIDATED HALLMARK and TRANSCORP HOTELS

The main advantage of trading using opposite CONSOLIDATED HALLMARK and TRANSCORP HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK INSURANCE 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.