Correlation Between COMMERCIAL BANK and Arpico Insurance
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By analyzing existing cross correlation between COMMERCIAL BANK OF and Arpico Insurance, you can compare the effects of market volatilities on COMMERCIAL BANK and Arpico Insurance 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 COMMERCIAL BANK with a short position of Arpico Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL BANK and Arpico Insurance.
Diversification Opportunities for COMMERCIAL BANK and Arpico Insurance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COMMERCIAL and Arpico is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL BANK OF and Arpico Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arpico Insurance and COMMERCIAL BANK 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 COMMERCIAL BANK OF are associated (or correlated) with Arpico Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arpico Insurance has no effect on the direction of COMMERCIAL BANK i.e., COMMERCIAL BANK and Arpico Insurance go up and down completely randomly.
Pair Corralation between COMMERCIAL BANK and Arpico Insurance
Assuming the 90 days trading horizon COMMERCIAL BANK OF is expected to generate 0.43 times more return on investment than Arpico Insurance. However, COMMERCIAL BANK OF is 2.34 times less risky than Arpico Insurance. It trades about 0.1 of its potential returns per unit of risk. Arpico Insurance is currently generating about 0.04 per unit of risk. If you would invest 7,230 in COMMERCIAL BANK OF on September 15, 2024 and sell it today you would earn a total of 2,945 from holding COMMERCIAL BANK OF or generate 40.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 61.87% |
| Values | Daily Returns |
COMMERCIAL BANK OF vs. Arpico Insurance
Performance |
| Timeline |
| COMMERCIAL BANK |
| Arpico Insurance |
COMMERCIAL BANK and Arpico Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL BANK and Arpico Insurance
The main advantage of trading using opposite COMMERCIAL BANK and Arpico Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL BANK position performs unexpectedly, Arpico Insurance 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 Arpico Insurance will offset losses from the drop in Arpico Insurance's long position.| COMMERCIAL BANK vs. Mahaweli Reach Hotel | COMMERCIAL BANK vs. Union Chemicals Lanka | COMMERCIAL BANK vs. Janashakthi Insurance | COMMERCIAL BANK vs. Tangerine Beach Hotels |
| Arpico Insurance vs. Amana Bank | Arpico Insurance vs. Ceylon Tobacco | Arpico Insurance vs. Ceylon Hospitals PLC | Arpico Insurance vs. COMMERCIAL BANK OF |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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