Correlation Between CEYLINCO INSURANCE and Renuka City
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By analyzing existing cross correlation between CEYLINCO INSURANCE PLC and Renuka City Hotel, you can compare the effects of market volatilities on CEYLINCO INSURANCE and Renuka City 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 Renuka City. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEYLINCO INSURANCE and Renuka City.
Diversification Opportunities for CEYLINCO INSURANCE and Renuka City
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CEYLINCO and Renuka is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CEYLINCO INSURANCE PLC and Renuka City Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renuka City Hotel 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 Renuka City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renuka City Hotel has no effect on the direction of CEYLINCO INSURANCE i.e., CEYLINCO INSURANCE and Renuka City go up and down completely randomly.
Pair Corralation between CEYLINCO INSURANCE and Renuka City
Assuming the 90 days trading horizon CEYLINCO INSURANCE is expected to generate 2.75 times less return on investment than Renuka City. But when comparing it to its historical volatility, CEYLINCO INSURANCE PLC is 2.37 times less risky than Renuka City. It trades about 0.21 of its potential returns per unit of risk. Renuka City Hotel is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 35,650 in Renuka City Hotel on August 28, 2024 and sell it today you would earn a total of 3,325 from holding Renuka City Hotel or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.5% |
| Values | Daily Returns |
CEYLINCO INSURANCE PLC vs. Renuka City Hotel
Performance |
| Timeline |
| CEYLINCO INSURANCE PLC |
| Renuka City Hotel |
CEYLINCO INSURANCE and Renuka City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEYLINCO INSURANCE and Renuka City
The main advantage of trading using opposite CEYLINCO INSURANCE and Renuka City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEYLINCO INSURANCE position performs unexpectedly, Renuka City 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 Renuka City will offset losses from the drop in Renuka City's long position.| CEYLINCO INSURANCE vs. Sanasa Development Bank | CEYLINCO INSURANCE vs. Union Chemicals Lanka | CEYLINCO INSURANCE vs. Union Bank | CEYLINCO INSURANCE vs. Ceylon Guardian Investment |
| Renuka City vs. Lanka Realty Investments | Renuka City vs. Nations Trust Bank | Renuka City vs. DFCC Bank PLC | Renuka City vs. Janashakthi Insurance |
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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