Correlation Between CEYLINCO INSURANCE and Union Chemicals
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By analyzing existing cross correlation between CEYLINCO INSURANCE PLC and Union Chemicals Lanka, you can compare the effects of market volatilities on CEYLINCO INSURANCE and Union Chemicals 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 Union Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEYLINCO INSURANCE and Union Chemicals.
Diversification Opportunities for CEYLINCO INSURANCE and Union Chemicals
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CEYLINCO and Union is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CEYLINCO INSURANCE PLC and Union Chemicals Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Chemicals Lanka 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 Union Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Chemicals Lanka has no effect on the direction of CEYLINCO INSURANCE i.e., CEYLINCO INSURANCE and Union Chemicals go up and down completely randomly.
Pair Corralation between CEYLINCO INSURANCE and Union Chemicals
Assuming the 90 days trading horizon CEYLINCO INSURANCE PLC is expected to generate 1.41 times more return on investment than Union Chemicals. However, CEYLINCO INSURANCE is 1.41 times more volatile than Union Chemicals Lanka. It trades about 0.12 of its potential returns per unit of risk. Union Chemicals Lanka is currently generating about 0.07 per unit of risk. If you would invest 95,550 in CEYLINCO INSURANCE PLC on August 31, 2024 and sell it today you would earn a total of 8,275 from holding CEYLINCO INSURANCE PLC or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.11% |
| Values | Daily Returns |
CEYLINCO INSURANCE PLC vs. Union Chemicals Lanka
Performance |
| Timeline |
| CEYLINCO INSURANCE PLC |
| Union Chemicals Lanka |
CEYLINCO INSURANCE and Union Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEYLINCO INSURANCE and Union Chemicals
The main advantage of trading using opposite CEYLINCO INSURANCE and Union Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEYLINCO INSURANCE position performs unexpectedly, Union Chemicals 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 Union Chemicals will offset losses from the drop in Union Chemicals' 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 |
| Union Chemicals vs. HATTON NATIONAL BANK | Union Chemicals vs. Citrus Leisure PLC | Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. CEYLINCO INSURANCE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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