Correlation Between DFCC Bank and COMMERCIAL BANK
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By analyzing existing cross correlation between DFCC Bank PLC and COMMERCIAL BANK OF, you can compare the effects of market volatilities on DFCC Bank and COMMERCIAL BANK 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 DFCC Bank with a short position of COMMERCIAL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFCC Bank and COMMERCIAL BANK.
Diversification Opportunities for DFCC Bank and COMMERCIAL BANK
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DFCC and COMMERCIAL is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding DFCC Bank PLC and COMMERCIAL BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL BANK and DFCC 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 DFCC Bank PLC are associated (or correlated) with COMMERCIAL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL BANK has no effect on the direction of DFCC Bank i.e., DFCC Bank and COMMERCIAL BANK go up and down completely randomly.
Pair Corralation between DFCC Bank and COMMERCIAL BANK
Assuming the 90 days trading horizon DFCC Bank is expected to generate 1.43 times less return on investment than COMMERCIAL BANK. But when comparing it to its historical volatility, DFCC Bank PLC is 1.16 times less risky than COMMERCIAL BANK. It trades about 0.3 of its potential returns per unit of risk. COMMERCIAL BANK OF is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 9,510 in COMMERCIAL BANK OF on September 20, 2024 and sell it today you would earn a total of 940.00 from holding COMMERCIAL BANK OF or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFCC Bank PLC vs. COMMERCIAL BANK OF
Performance |
| Timeline |
| DFCC Bank PLC |
| COMMERCIAL BANK |
DFCC Bank and COMMERCIAL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFCC Bank and COMMERCIAL BANK
The main advantage of trading using opposite DFCC Bank and COMMERCIAL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFCC Bank position performs unexpectedly, COMMERCIAL BANK 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 COMMERCIAL BANK will offset losses from the drop in COMMERCIAL BANK's long position.| DFCC Bank vs. Lanka Credit and | DFCC Bank vs. VIDULLANKA PLC | DFCC Bank vs. Carson Cumberbatch PLC | DFCC Bank vs. Peoples Insurance PLC |
| COMMERCIAL BANK vs. National Development Bank | COMMERCIAL BANK vs. DFCC Bank PLC | COMMERCIAL BANK vs. Asiri Surgical Hospital | COMMERCIAL BANK vs. Sampath Bank 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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