Correlation Between Ceylon Hospitals and Lankem Ceylon
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By analyzing existing cross correlation between Ceylon Hospitals PLC and Lankem Ceylon PLC, you can compare the effects of market volatilities on Ceylon Hospitals and Lankem Ceylon 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 Hospitals with a short position of Lankem Ceylon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hospitals and Lankem Ceylon.
Diversification Opportunities for Ceylon Hospitals and Lankem Ceylon
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ceylon and Lankem is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hospitals PLC and Lankem Ceylon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lankem Ceylon PLC and Ceylon Hospitals 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 Hospitals PLC are associated (or correlated) with Lankem Ceylon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lankem Ceylon PLC has no effect on the direction of Ceylon Hospitals i.e., Ceylon Hospitals and Lankem Ceylon go up and down completely randomly.
Pair Corralation between Ceylon Hospitals and Lankem Ceylon
Assuming the 90 days trading horizon Ceylon Hospitals PLC is expected to under-perform the Lankem Ceylon. But the stock apears to be less risky and, when comparing its historical volatility, Ceylon Hospitals PLC is 1.09 times less risky than Lankem Ceylon. The stock trades about -0.01 of its potential returns per unit of risk. The Lankem Ceylon PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,610 in Lankem Ceylon PLC on August 31, 2024 and sell it today you would earn a total of 310.00 from holding Lankem Ceylon PLC or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 73.37% |
| Values | Daily Returns |
Ceylon Hospitals PLC vs. Lankem Ceylon PLC
Performance |
| Timeline |
| Ceylon Hospitals PLC |
| Lankem Ceylon PLC |
Ceylon Hospitals and Lankem Ceylon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hospitals and Lankem Ceylon
The main advantage of trading using opposite Ceylon Hospitals and Lankem Ceylon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hospitals position performs unexpectedly, Lankem Ceylon 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 Lankem Ceylon will offset losses from the drop in Lankem Ceylon's long position.| Ceylon Hospitals vs. HNB Finance | Ceylon Hospitals vs. Prime Lands Residencies | Ceylon Hospitals vs. Jat Holdings PLC | Ceylon Hospitals 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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