Correlation Between Ceylon Cold and Sampath Bank
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By analyzing existing cross correlation between Ceylon Cold Stores and Sampath Bank PLC, you can compare the effects of market volatilities on Ceylon Cold and Sampath Bank 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 Cold with a short position of Sampath Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Cold and Sampath Bank.
Diversification Opportunities for Ceylon Cold and Sampath Bank
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ceylon and Sampath is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Cold Stores and Sampath Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampath Bank PLC and Ceylon Cold 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 Cold Stores are associated (or correlated) with Sampath Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampath Bank PLC has no effect on the direction of Ceylon Cold i.e., Ceylon Cold and Sampath Bank go up and down completely randomly.
Pair Corralation between Ceylon Cold and Sampath Bank
Assuming the 90 days trading horizon Ceylon Cold is expected to generate 1.47 times less return on investment than Sampath Bank. In addition to that, Ceylon Cold is 1.01 times more volatile than Sampath Bank PLC. It trades about 0.08 of its total potential returns per unit of risk. Sampath Bank PLC is currently generating about 0.12 per unit of volatility. If you would invest 5,020 in Sampath Bank PLC on September 1, 2024 and sell it today you would earn a total of 4,760 from holding Sampath Bank PLC or generate 94.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Cold Stores vs. Sampath Bank PLC
Performance |
| Timeline |
| Ceylon Cold Stores |
| Sampath Bank PLC |
Ceylon Cold and Sampath Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Cold and Sampath Bank
The main advantage of trading using opposite Ceylon Cold and Sampath Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Cold position performs unexpectedly, Sampath Bank 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 Sampath Bank will offset losses from the drop in Sampath Bank's long position.| Ceylon Cold vs. HNB Finance | Ceylon Cold vs. Prime Lands Residencies | Ceylon Cold vs. Jat Holdings PLC | Ceylon Cold vs. E M L |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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