Correlation Between CEYLINCO INSURANCE and Ceylon Hospitals
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By analyzing existing cross correlation between CEYLINCO INSURANCE PLC and Ceylon Hospitals PLC, you can compare the effects of market volatilities on CEYLINCO INSURANCE and Ceylon Hospitals 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 Ceylon Hospitals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEYLINCO INSURANCE and Ceylon Hospitals.
Diversification Opportunities for CEYLINCO INSURANCE and Ceylon Hospitals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CEYLINCO and Ceylon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CEYLINCO INSURANCE PLC and Ceylon Hospitals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Hospitals 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 Ceylon Hospitals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Hospitals PLC has no effect on the direction of CEYLINCO INSURANCE i.e., CEYLINCO INSURANCE and Ceylon Hospitals go up and down completely randomly.
Pair Corralation between CEYLINCO INSURANCE and Ceylon Hospitals
Assuming the 90 days trading horizon CEYLINCO INSURANCE is expected to generate 2.15 times less return on investment than Ceylon Hospitals. But when comparing it to its historical volatility, CEYLINCO INSURANCE PLC is 1.73 times less risky than Ceylon Hospitals. It trades about 0.05 of its potential returns per unit of risk. Ceylon Hospitals PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,500 in Ceylon Hospitals PLC on August 24, 2024 and sell it today you would earn a total of 200.00 from holding Ceylon Hospitals PLC or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
CEYLINCO INSURANCE PLC vs. Ceylon Hospitals PLC
Performance |
| Timeline |
| CEYLINCO INSURANCE PLC |
| Ceylon Hospitals PLC |
CEYLINCO INSURANCE and Ceylon Hospitals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEYLINCO INSURANCE and Ceylon Hospitals
The main advantage of trading using opposite CEYLINCO INSURANCE and Ceylon Hospitals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEYLINCO INSURANCE position performs unexpectedly, Ceylon Hospitals 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 Ceylon Hospitals will offset losses from the drop in Ceylon Hospitals' long position.| CEYLINCO INSURANCE vs. HNB Finance | CEYLINCO INSURANCE vs. Prime Lands Residencies | CEYLINCO INSURANCE vs. Jat Holdings PLC | CEYLINCO INSURANCE vs. E M L |
| Ceylon Hospitals vs. HNB Finance | Ceylon Hospitals vs. Prime Lands Residencies | Ceylon Hospitals vs. Jat Holdings PLC | Ceylon Hospitals 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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