Correlation Between Ceylon Hotels and Lanka Credit
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By analyzing existing cross correlation between Ceylon Hotels and Lanka Credit and, you can compare the effects of market volatilities on Ceylon Hotels and Lanka Credit 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 Lanka Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hotels and Lanka Credit.
Diversification Opportunities for Ceylon Hotels and Lanka Credit
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ceylon and Lanka is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hotels and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit 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 Lanka Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Credit has no effect on the direction of Ceylon Hotels i.e., Ceylon Hotels and Lanka Credit go up and down completely randomly.
Pair Corralation between Ceylon Hotels and Lanka Credit
Assuming the 90 days trading horizon Ceylon Hotels is expected to generate 1.01 times less return on investment than Lanka Credit. But when comparing it to its historical volatility, Ceylon Hotels is 1.53 times less risky than Lanka Credit. It trades about 0.02 of its potential returns per unit of risk. Lanka Credit and is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Lanka Credit and on September 3, 2024 and sell it today you would lose (10.00) from holding Lanka Credit and or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.16% |
| Values | Daily Returns |
Ceylon Hotels vs. Lanka Credit and
Performance |
| Timeline |
| Ceylon Hotels |
| Lanka Credit |
Ceylon Hotels and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hotels and Lanka Credit
The main advantage of trading using opposite Ceylon Hotels and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hotels position performs unexpectedly, Lanka Credit 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 Lanka Credit will offset losses from the drop in Lanka Credit's long position.| Ceylon Hotels vs. Lanka Credit and | Ceylon Hotels vs. VIDULLANKA PLC | Ceylon Hotels vs. Carson Cumberbatch PLC | Ceylon Hotels vs. Peoples Insurance PLC |
| Lanka Credit vs. Renuka City Hotel | Lanka Credit vs. ACL Plastics PLC | Lanka Credit vs. COMMERCIAL BANK OF | Lanka Credit vs. Janashakthi Insurance |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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