Correlation Between Ceylon Hotels and Serendib Hotels
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By analyzing existing cross correlation between Ceylon Hotels and Serendib Hotels PLC, you can compare the effects of market volatilities on Ceylon Hotels and Serendib Hotels 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 Serendib Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hotels and Serendib Hotels.
Diversification Opportunities for Ceylon Hotels and Serendib Hotels
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ceylon and Serendib is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hotels and Serendib Hotels PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serendib Hotels PLC 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 Serendib Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serendib Hotels PLC has no effect on the direction of Ceylon Hotels i.e., Ceylon Hotels and Serendib Hotels go up and down completely randomly.
Pair Corralation between Ceylon Hotels and Serendib Hotels
Assuming the 90 days trading horizon Ceylon Hotels is expected to generate 3.22 times less return on investment than Serendib Hotels. But when comparing it to its historical volatility, Ceylon Hotels is 1.15 times less risky than Serendib Hotels. It trades about 0.03 of its potential returns per unit of risk. Serendib Hotels PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 880.00 in Serendib Hotels PLC on August 31, 2024 and sell it today you would earn a total of 890.00 from holding Serendib Hotels PLC or generate 101.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Hotels vs. Serendib Hotels PLC
Performance |
| Timeline |
| Ceylon Hotels |
| Serendib Hotels PLC |
Ceylon Hotels and Serendib Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hotels and Serendib Hotels
The main advantage of trading using opposite Ceylon Hotels and Serendib Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hotels position performs unexpectedly, Serendib Hotels 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 Serendib Hotels will offset losses from the drop in Serendib Hotels' 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 |
| Serendib Hotels vs. HNB Finance | Serendib Hotels vs. Prime Lands Residencies | Serendib Hotels vs. Jat Holdings PLC | Serendib Hotels 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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