Correlation Between Distilleries Company and Sampath Bank
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By analyzing existing cross correlation between Distilleries Company of and Sampath Bank PLC, you can compare the effects of market volatilities on Distilleries Company and Sampath 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 Distilleries Company with a short position of Sampath Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distilleries Company and Sampath Bank.
Diversification Opportunities for Distilleries Company and Sampath Bank
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Distilleries and Sampath is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Distilleries Company of and Sampath Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampath Bank PLC and Distilleries Company 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 Distilleries Company of are associated (or correlated) with Sampath Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampath Bank PLC has no effect on the direction of Distilleries Company i.e., Distilleries Company and Sampath Bank go up and down completely randomly.
Pair Corralation between Distilleries Company and Sampath Bank
Assuming the 90 days trading horizon Distilleries Company is expected to generate 1.3 times less return on investment than Sampath Bank. But when comparing it to its historical volatility, Distilleries Company of is 1.01 times less risky than Sampath Bank. It trades about 0.29 of its potential returns per unit of risk. Sampath Bank PLC is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 7,700 in Sampath Bank PLC on August 28, 2024 and sell it today you would earn a total of 1,710 from holding Sampath Bank PLC or generate 22.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Distilleries Company of vs. Sampath Bank PLC
Performance |
| Timeline |
| Distilleries Company |
| Sampath Bank PLC |
Distilleries Company and Sampath Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distilleries Company and Sampath Bank
The main advantage of trading using opposite Distilleries Company and Sampath Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distilleries Company position performs unexpectedly, Sampath 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 Sampath Bank will offset losses from the drop in Sampath Bank's long position.| Distilleries Company vs. Sri Lanka Telecom | Distilleries Company vs. COMMERCIAL BANK OF | Distilleries Company vs. Lanka Milk Foods | Distilleries Company vs. Pan Asia Banking |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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