Correlation Between Ceylon Tobacco and Sigiriya Village
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By analyzing existing cross correlation between Ceylon Tobacco and Sigiriya Village Hotels, you can compare the effects of market volatilities on Ceylon Tobacco and Sigiriya Village 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 Ceylon Tobacco with a short position of Sigiriya Village. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Tobacco and Sigiriya Village.
Diversification Opportunities for Ceylon Tobacco and Sigiriya Village
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ceylon and Sigiriya is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Tobacco and Sigiriya Village Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigiriya Village Hotels and Ceylon Tobacco 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 Ceylon Tobacco are associated (or correlated) with Sigiriya Village. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigiriya Village Hotels has no effect on the direction of Ceylon Tobacco i.e., Ceylon Tobacco and Sigiriya Village go up and down completely randomly.
Pair Corralation between Ceylon Tobacco and Sigiriya Village
Assuming the 90 days trading horizon Ceylon Tobacco is expected to generate 14.72 times less return on investment than Sigiriya Village. But when comparing it to its historical volatility, Ceylon Tobacco is 2.87 times less risky than Sigiriya Village. It trades about 0.07 of its potential returns per unit of risk. Sigiriya Village Hotels is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,700 in Sigiriya Village Hotels on August 28, 2024 and sell it today you would earn a total of 670.00 from holding Sigiriya Village Hotels or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Tobacco vs. Sigiriya Village Hotels
Performance |
| Timeline |
| Ceylon Tobacco |
| Sigiriya Village Hotels |
Ceylon Tobacco and Sigiriya Village Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Tobacco and Sigiriya Village
The main advantage of trading using opposite Ceylon Tobacco and Sigiriya Village positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Tobacco position performs unexpectedly, Sigiriya Village 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 Sigiriya Village will offset losses from the drop in Sigiriya Village's long position.| Ceylon Tobacco vs. National Development Bank | Ceylon Tobacco vs. Hatton National Bank | Ceylon Tobacco vs. Amana Bank | Ceylon Tobacco vs. Sampath Bank PLC |
| Sigiriya Village vs. Arpico Insurance | Sigiriya Village vs. Lanka Realty Investments | Sigiriya Village vs. Sampath Bank PLC | Sigiriya Village 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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