Correlation Between Ceylon Beverage and Sri Lanka
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By analyzing existing cross correlation between Ceylon Beverage Holdings and Sri Lanka Telecom, you can compare the effects of market volatilities on Ceylon Beverage and Sri Lanka 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 Ceylon Beverage with a short position of Sri Lanka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Beverage and Sri Lanka.
Diversification Opportunities for Ceylon Beverage and Sri Lanka
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ceylon and Sri is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Beverage Holdings and Sri Lanka Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Lanka Telecom and Ceylon Beverage 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 Ceylon Beverage Holdings are associated (or correlated) with Sri Lanka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Lanka Telecom has no effect on the direction of Ceylon Beverage i.e., Ceylon Beverage and Sri Lanka go up and down completely randomly.
Pair Corralation between Ceylon Beverage and Sri Lanka
Assuming the 90 days trading horizon Ceylon Beverage Holdings is expected to generate 0.75 times more return on investment than Sri Lanka. However, Ceylon Beverage Holdings is 1.34 times less risky than Sri Lanka. It trades about 0.12 of its potential returns per unit of risk. Sri Lanka Telecom is currently generating about -0.08 per unit of risk. If you would invest 198,975 in Ceylon Beverage Holdings on September 3, 2024 and sell it today you would earn a total of 21,050 from holding Ceylon Beverage Holdings or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 45.45% |
| Values | Daily Returns |
Ceylon Beverage Holdings vs. Sri Lanka Telecom
Performance |
| Timeline |
| Ceylon Beverage Holdings |
| Sri Lanka Telecom |
Ceylon Beverage and Sri Lanka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Beverage and Sri Lanka
The main advantage of trading using opposite Ceylon Beverage and Sri Lanka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Beverage position performs unexpectedly, Sri Lanka 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 Sri Lanka will offset losses from the drop in Sri Lanka's long position.| Ceylon Beverage vs. Singhe Hospitals | Ceylon Beverage vs. Pegasus Hotels of | Ceylon Beverage vs. Eden Hotel Lanka | Ceylon Beverage vs. Lighthouse Hotel PLC |
| Sri Lanka vs. Lanka Credit and | Sri Lanka vs. VIDULLANKA PLC | Sri Lanka vs. Carson Cumberbatch PLC | Sri Lanka 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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