Correlation Between Ceylon Hotels and Renuka City
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By analyzing existing cross correlation between Ceylon Hotels and Renuka City Hotel, you can compare the effects of market volatilities on Ceylon Hotels and Renuka City 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 Renuka City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hotels and Renuka City.
Diversification Opportunities for Ceylon Hotels and Renuka City
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ceylon and Renuka is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hotels and Renuka City Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renuka City Hotel 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 Renuka City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renuka City Hotel has no effect on the direction of Ceylon Hotels i.e., Ceylon Hotels and Renuka City go up and down completely randomly.
Pair Corralation between Ceylon Hotels and Renuka City
Assuming the 90 days trading horizon Ceylon Hotels is expected to generate 1.41 times less return on investment than Renuka City. In addition to that, Ceylon Hotels is 1.11 times more volatile than Renuka City Hotel. It trades about 0.16 of its total potential returns per unit of risk. Renuka City Hotel is currently generating about 0.25 per unit of volatility. If you would invest 35,650 in Renuka City Hotel on August 28, 2024 and sell it today you would earn a total of 3,325 from holding Renuka City Hotel or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Ceylon Hotels vs. Renuka City Hotel
Performance |
| Timeline |
| Ceylon Hotels |
| Renuka City Hotel |
Ceylon Hotels and Renuka City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hotels and Renuka City
The main advantage of trading using opposite Ceylon Hotels and Renuka City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hotels position performs unexpectedly, Renuka City 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 Renuka City will offset losses from the drop in Renuka City's long position.| Ceylon Hotels vs. Nuwara Eliya Hotels | Ceylon Hotels vs. Tal Lanka Hotels | Ceylon Hotels vs. Renuka Agri Foods | Ceylon Hotels vs. Aitken Spence Hotel |
| Renuka City vs. Lanka Realty Investments | Renuka City vs. Nations Trust Bank | Renuka City vs. DFCC Bank PLC | Renuka City 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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