Correlation Between Ceylon Hotels and Arpico Insurance
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By analyzing existing cross correlation between Ceylon Hotels and Arpico Insurance, you can compare the effects of market volatilities on Ceylon Hotels and Arpico 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 Ceylon Hotels with a short position of Arpico Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hotels and Arpico Insurance.
Diversification Opportunities for Ceylon Hotels and Arpico Insurance
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ceylon and Arpico is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hotels and Arpico Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arpico Insurance and Ceylon Hotels 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 Hotels are associated (or correlated) with Arpico Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arpico Insurance has no effect on the direction of Ceylon Hotels i.e., Ceylon Hotels and Arpico Insurance go up and down completely randomly.
Pair Corralation between Ceylon Hotels and Arpico Insurance
Assuming the 90 days trading horizon Ceylon Hotels is expected to generate 1.21 times more return on investment than Arpico Insurance. However, Ceylon Hotels is 1.21 times more volatile than Arpico Insurance. It trades about 0.21 of its potential returns per unit of risk. Arpico Insurance is currently generating about -0.32 per unit of risk. If you would invest 1,900 in Ceylon Hotels on August 31, 2024 and sell it today you would earn a total of 210.00 from holding Ceylon Hotels or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Ceylon Hotels vs. Arpico Insurance
Performance |
| Timeline |
| Ceylon Hotels |
| Arpico Insurance |
Ceylon Hotels and Arpico Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hotels and Arpico Insurance
The main advantage of trading using opposite Ceylon Hotels and Arpico Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hotels position performs unexpectedly, Arpico 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 Arpico Insurance will offset losses from the drop in Arpico Insurance's long position.| Ceylon Hotels vs. HNB Finance | Ceylon Hotels vs. Prime Lands Residencies | Ceylon Hotels vs. Jat Holdings PLC | Ceylon Hotels vs. E M L |
| Arpico Insurance vs. HNB Finance | Arpico Insurance vs. Prime Lands Residencies | Arpico Insurance vs. Jat Holdings PLC | Arpico 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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