Correlation Between Lanka Realty and Ceylinco Insurance
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By analyzing existing cross correlation between Lanka Realty Investments and Ceylinco Insurance PLC, you can compare the effects of market volatilities on Lanka Realty and Ceylinco Insurance 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 Lanka Realty with a short position of Ceylinco Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Realty and Ceylinco Insurance.
Diversification Opportunities for Lanka Realty and Ceylinco Insurance
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lanka and Ceylinco is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Realty Investments and Ceylinco Insurance PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylinco Insurance PLC and Lanka Realty 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 Lanka Realty Investments are associated (or correlated) with Ceylinco Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylinco Insurance PLC has no effect on the direction of Lanka Realty i.e., Lanka Realty and Ceylinco Insurance go up and down completely randomly.
Pair Corralation between Lanka Realty and Ceylinco Insurance
Assuming the 90 days trading horizon Lanka Realty Investments is expected to under-perform the Ceylinco Insurance. In addition to that, Lanka Realty is 1.42 times more volatile than Ceylinco Insurance PLC. It trades about -0.14 of its total potential returns per unit of risk. Ceylinco Insurance PLC is currently generating about 0.35 per unit of volatility. If you would invest 236,400 in Ceylinco Insurance PLC on August 31, 2024 and sell it today you would earn a total of 18,375 from holding Ceylinco Insurance PLC or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.0% |
| Values | Daily Returns |
Lanka Realty Investments vs. Ceylinco Insurance PLC
Performance |
| Timeline |
| Lanka Realty Investments |
| Ceylinco Insurance PLC |
Lanka Realty and Ceylinco Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Realty and Ceylinco Insurance
The main advantage of trading using opposite Lanka Realty and Ceylinco Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Realty position performs unexpectedly, Ceylinco Insurance 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 Ceylinco Insurance will offset losses from the drop in Ceylinco Insurance's long position.| Lanka Realty vs. HNB Finance | Lanka Realty vs. Prime Lands Residencies | Lanka Realty vs. Jat Holdings PLC | Lanka Realty vs. E M L |
| Ceylinco Insurance vs. HNB Finance | Ceylinco Insurance vs. Prime Lands Residencies | Ceylinco Insurance vs. Jat Holdings PLC | Ceylinco Insurance vs. E M L |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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