Correlation Between DFCC Bank and Peoples Insurance
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By analyzing existing cross correlation between DFCC Bank PLC and Peoples Insurance PLC, you can compare the effects of market volatilities on DFCC Bank and Peoples 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 DFCC Bank with a short position of Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFCC Bank and Peoples Insurance.
Diversification Opportunities for DFCC Bank and Peoples Insurance
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DFCC and Peoples is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding DFCC Bank PLC and Peoples Insurance PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance PLC 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 Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance PLC has no effect on the direction of DFCC Bank i.e., DFCC Bank and Peoples Insurance go up and down completely randomly.
Pair Corralation between DFCC Bank and Peoples Insurance
Assuming the 90 days trading horizon DFCC Bank PLC is expected to generate 0.86 times more return on investment than Peoples Insurance. However, DFCC Bank PLC is 1.16 times less risky than Peoples Insurance. It trades about 0.13 of its potential returns per unit of risk. Peoples Insurance PLC is currently generating about 0.05 per unit of risk. If you would invest 8,290 in DFCC Bank PLC on August 28, 2024 and sell it today you would earn a total of 330.00 from holding DFCC Bank PLC or generate 3.98% 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. Peoples Insurance PLC
Performance |
| Timeline |
| DFCC Bank PLC |
| Peoples Insurance PLC |
DFCC Bank and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFCC Bank and Peoples Insurance
The main advantage of trading using opposite DFCC Bank and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFCC Bank position performs unexpectedly, Peoples 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.| DFCC Bank vs. CEYLON HOSPITALS PLC | DFCC Bank vs. RENUKA FOODS PLC | DFCC Bank vs. Lanka Milk Foods | DFCC Bank vs. Distilleries Company of |
| Peoples Insurance vs. Ceylon Hospitals PLC | Peoples Insurance vs. Ceylon Guardian Investment | Peoples Insurance vs. Lanka Realty Investments | Peoples Insurance vs. Palm Garden Hotels |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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