Correlation Between Ceylinco Insurance and Central Industries
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By analyzing existing cross correlation between Ceylinco Insurance PLC and Central Industries PLC, you can compare the effects of market volatilities on Ceylinco Insurance and Central Industries 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 Ceylinco Insurance with a short position of Central Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylinco Insurance and Central Industries.
Diversification Opportunities for Ceylinco Insurance and Central Industries
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ceylinco and Central is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ceylinco Insurance PLC and Central Industries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industries PLC and Ceylinco Insurance 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 Ceylinco Insurance PLC are associated (or correlated) with Central Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industries PLC has no effect on the direction of Ceylinco Insurance i.e., Ceylinco Insurance and Central Industries go up and down completely randomly.
Pair Corralation between Ceylinco Insurance and Central Industries
Assuming the 90 days trading horizon Ceylinco Insurance is expected to generate 1.85 times less return on investment than Central Industries. But when comparing it to its historical volatility, Ceylinco Insurance PLC is 1.15 times less risky than Central Industries. It trades about 0.04 of its potential returns per unit of risk. Central Industries PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,290 in Central Industries PLC on September 5, 2024 and sell it today you would earn a total of 5,310 from holding Central Industries PLC or generate 84.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.3% |
| Values | Daily Returns |
Ceylinco Insurance PLC vs. Central Industries PLC
Performance |
| Timeline |
| Ceylinco Insurance PLC |
| Central Industries PLC |
Ceylinco Insurance and Central Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylinco Insurance and Central Industries
The main advantage of trading using opposite Ceylinco Insurance and Central Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylinco Insurance position performs unexpectedly, Central Industries 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 Central Industries will offset losses from the drop in Central Industries' long position.| Ceylinco Insurance vs. Lanka Realty Investments | Ceylinco Insurance vs. Sigiriya Village Hotels | Ceylinco Insurance vs. Nuwara Eliya Hotels | Ceylinco Insurance vs. Sri Lanka Telecom |
| Central Industries vs. Convenience Foods PLC | Central Industries vs. Ceylinco Insurance PLC | Central Industries vs. RENUKA FOODS PLC | Central Industries vs. HATTON NATIONAL BANK |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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