Correlation Between Amana Bank and Ceylon Cold
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By analyzing existing cross correlation between Amana Bank and Ceylon Cold Stores, you can compare the effects of market volatilities on Amana Bank and Ceylon Cold 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 Amana Bank with a short position of Ceylon Cold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Bank and Ceylon Cold.
Diversification Opportunities for Amana Bank and Ceylon Cold
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amana and Ceylon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Amana Bank and Ceylon Cold Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Cold Stores and Amana Bank 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 Amana Bank are associated (or correlated) with Ceylon Cold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Cold Stores has no effect on the direction of Amana Bank i.e., Amana Bank and Ceylon Cold go up and down completely randomly.
Pair Corralation between Amana Bank and Ceylon Cold
Assuming the 90 days trading horizon Amana Bank is expected to generate 6.26 times less return on investment than Ceylon Cold. In addition to that, Amana Bank is 1.43 times more volatile than Ceylon Cold Stores. It trades about 0.03 of its total potential returns per unit of risk. Ceylon Cold Stores is currently generating about 0.22 per unit of volatility. If you would invest 6,280 in Ceylon Cold Stores on August 27, 2024 and sell it today you would earn a total of 220.00 from holding Ceylon Cold Stores or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amana Bank vs. Ceylon Cold Stores
Performance |
| Timeline |
| Amana Bank |
| Ceylon Cold Stores |
Amana Bank and Ceylon Cold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amana Bank and Ceylon Cold
The main advantage of trading using opposite Amana Bank and Ceylon Cold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Bank position performs unexpectedly, Ceylon Cold 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 Ceylon Cold will offset losses from the drop in Ceylon Cold's long position.| Amana Bank vs. Nuwara Eliya Hotels | Amana Bank vs. Eden Hotel Lanka | Amana Bank vs. SERENDIB HOTELS PLC | Amana Bank vs. Galadari Hotels Lanka |
| Ceylon Cold vs. Amana Bank | Ceylon Cold vs. Ceylinco Insurance PLC | Ceylon Cold vs. Seylan Bank PLC | Ceylon Cold vs. Peoples Insurance 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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