Correlation Between Ceylon Hotels and Sanasa Development
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By analyzing existing cross correlation between Ceylon Hotels and Sanasa Development Bank, you can compare the effects of market volatilities on Ceylon Hotels and Sanasa Development 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 Sanasa Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hotels and Sanasa Development.
Diversification Opportunities for Ceylon Hotels and Sanasa Development
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ceylon and Sanasa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hotels and Sanasa Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanasa Development Bank 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 Sanasa Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanasa Development Bank has no effect on the direction of Ceylon Hotels i.e., Ceylon Hotels and Sanasa Development go up and down completely randomly.
Pair Corralation between Ceylon Hotels and Sanasa Development
Assuming the 90 days trading horizon Ceylon Hotels is expected to generate 1.43 times more return on investment than Sanasa Development. However, Ceylon Hotels is 1.43 times more volatile than Sanasa Development Bank. It trades about 0.16 of its potential returns per unit of risk. Sanasa Development Bank is currently generating about 0.12 per unit of risk. If you would invest 1,930 in Ceylon Hotels on September 3, 2024 and sell it today you would earn a total of 270.00 from holding Ceylon Hotels or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Hotels vs. Sanasa Development Bank
Performance |
| Timeline |
| Ceylon Hotels |
| Sanasa Development Bank |
Ceylon Hotels and Sanasa Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hotels and Sanasa Development
The main advantage of trading using opposite Ceylon Hotels and Sanasa Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hotels position performs unexpectedly, Sanasa Development 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 Sanasa Development will offset losses from the drop in Sanasa Development'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 |
| Sanasa Development vs. Lanka Credit and | Sanasa Development vs. VIDULLANKA PLC | Sanasa Development vs. Carson Cumberbatch PLC | Sanasa Development vs. Peoples Insurance PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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