Correlation Between CEYLINCO INSURANCE and BROWNS INVESTMENTS
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By analyzing existing cross correlation between CEYLINCO INSURANCE PLC and BROWNS INVESTMENTS PLC, you can compare the effects of market volatilities on CEYLINCO INSURANCE and BROWNS INVESTMENTS 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 BROWNS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEYLINCO INSURANCE and BROWNS INVESTMENTS.
Diversification Opportunities for CEYLINCO INSURANCE and BROWNS INVESTMENTS
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CEYLINCO and BROWNS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CEYLINCO INSURANCE PLC and BROWNS INVESTMENTS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROWNS INVESTMENTS 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 BROWNS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROWNS INVESTMENTS PLC has no effect on the direction of CEYLINCO INSURANCE i.e., CEYLINCO INSURANCE and BROWNS INVESTMENTS go up and down completely randomly.
Pair Corralation between CEYLINCO INSURANCE and BROWNS INVESTMENTS
Assuming the 90 days trading horizon CEYLINCO INSURANCE is expected to generate 1.66 times less return on investment than BROWNS INVESTMENTS. But when comparing it to its historical volatility, CEYLINCO INSURANCE PLC is 1.25 times less risky than BROWNS INVESTMENTS. It trades about 0.13 of its potential returns per unit of risk. BROWNS INVESTMENTS PLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 480.00 in BROWNS INVESTMENTS PLC on August 31, 2024 and sell it today you would earn a total of 110.00 from holding BROWNS INVESTMENTS PLC or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.22% |
| Values | Daily Returns |
CEYLINCO INSURANCE PLC vs. BROWNS INVESTMENTS PLC
Performance |
| Timeline |
| CEYLINCO INSURANCE PLC |
| BROWNS INVESTMENTS PLC |
CEYLINCO INSURANCE and BROWNS INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEYLINCO INSURANCE and BROWNS INVESTMENTS
The main advantage of trading using opposite CEYLINCO INSURANCE and BROWNS INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEYLINCO INSURANCE position performs unexpectedly, BROWNS INVESTMENTS 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 BROWNS INVESTMENTS will offset losses from the drop in BROWNS INVESTMENTS's long position.| CEYLINCO INSURANCE vs. Ceylon Cold Stores | CEYLINCO INSURANCE vs. HDFC Bank of | CEYLINCO INSURANCE vs. HATTON NATIONAL BANK | CEYLINCO INSURANCE vs. Sanasa Development Bank |
| BROWNS INVESTMENTS vs. Aitken Spence Hotel | BROWNS INVESTMENTS vs. Lanka Realty Investments | BROWNS INVESTMENTS vs. Keells Food Products | BROWNS INVESTMENTS vs. Ceylon Guardian Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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