Correlation Between ACL Plastics and Sigiriya Village
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By analyzing existing cross correlation between ACL Plastics PLC and Sigiriya Village Hotels, you can compare the effects of market volatilities on ACL Plastics and Sigiriya Village 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 ACL Plastics with a short position of Sigiriya Village. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACL Plastics and Sigiriya Village.
Diversification Opportunities for ACL Plastics and Sigiriya Village
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ACL and Sigiriya is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ACL Plastics PLC and Sigiriya Village Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigiriya Village Hotels and ACL Plastics 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 ACL Plastics PLC are associated (or correlated) with Sigiriya Village. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigiriya Village Hotels has no effect on the direction of ACL Plastics i.e., ACL Plastics and Sigiriya Village go up and down completely randomly.
Pair Corralation between ACL Plastics and Sigiriya Village
Assuming the 90 days trading horizon ACL Plastics is expected to generate 2.58 times less return on investment than Sigiriya Village. But when comparing it to its historical volatility, ACL Plastics PLC is 1.98 times less risky than Sigiriya Village. It trades about 0.32 of its potential returns per unit of risk. Sigiriya Village Hotels is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 3,300 in Sigiriya Village Hotels on September 12, 2024 and sell it today you would earn a total of 3,210 from holding Sigiriya Village Hotels or generate 97.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.31% |
| Values | Daily Returns |
ACL Plastics PLC vs. Sigiriya Village Hotels
Performance |
| Timeline |
| ACL Plastics PLC |
| Sigiriya Village Hotels |
ACL Plastics and Sigiriya Village Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACL Plastics and Sigiriya Village
The main advantage of trading using opposite ACL Plastics and Sigiriya Village positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACL Plastics position performs unexpectedly, Sigiriya Village 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 Sigiriya Village will offset losses from the drop in Sigiriya Village's long position.| ACL Plastics vs. Jat Holdings PLC | ACL Plastics vs. Lanka Credit and | ACL Plastics vs. VIDULLANKA PLC | ACL Plastics vs. Carson Cumberbatch PLC |
| Sigiriya Village vs. Jat Holdings PLC | Sigiriya Village vs. Lanka Credit and | Sigiriya Village vs. VIDULLANKA PLC | Sigiriya Village vs. Carson Cumberbatch 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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