Correlation Between Ceylon Hotels and Convenience Foods
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By analyzing existing cross correlation between Ceylon Hotels and Convenience Foods PLC, you can compare the effects of market volatilities on Ceylon Hotels and Convenience Foods 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 Convenience Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hotels and Convenience Foods.
Diversification Opportunities for Ceylon Hotels and Convenience Foods
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ceylon and Convenience is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hotels and Convenience Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Convenience Foods 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 Convenience Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Convenience Foods PLC has no effect on the direction of Ceylon Hotels i.e., Ceylon Hotels and Convenience Foods go up and down completely randomly.
Pair Corralation between Ceylon Hotels and Convenience Foods
Assuming the 90 days trading horizon Ceylon Hotels is expected to generate 1.2 times more return on investment than Convenience Foods. However, Ceylon Hotels is 1.2 times more volatile than Convenience Foods PLC. It trades about 0.02 of its potential returns per unit of risk. Convenience Foods PLC is currently generating about -0.06 per unit of risk. If you would invest 1,910 in Ceylon Hotels on August 27, 2024 and sell it today you would earn a total of 110.00 from holding Ceylon Hotels or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 75.5% |
| Values | Daily Returns |
Ceylon Hotels vs. Convenience Foods PLC
Performance |
| Timeline |
| Ceylon Hotels |
| Convenience Foods PLC |
Ceylon Hotels and Convenience Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hotels and Convenience Foods
The main advantage of trading using opposite Ceylon Hotels and Convenience Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hotels position performs unexpectedly, Convenience Foods 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 Convenience Foods will offset losses from the drop in Convenience Foods' 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 |
| Convenience Foods vs. Union Chemicals Lanka | Convenience Foods vs. Union Bank | Convenience Foods vs. Janashakthi Insurance | Convenience Foods vs. Seylan Bank 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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