Correlation Between E M and CEYLINCO INSURANCE
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By analyzing existing cross correlation between E M L and CEYLINCO INSURANCE PLC, you can compare the effects of market volatilities on E M and CEYLINCO 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 E M with a short position of CEYLINCO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of E M and CEYLINCO INSURANCE.
Diversification Opportunities for E M and CEYLINCO INSURANCE
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMLN0000 and CEYLINCO is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding E M L and CEYLINCO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEYLINCO INSURANCE PLC and E M 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 E M L are associated (or correlated) with CEYLINCO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEYLINCO INSURANCE PLC has no effect on the direction of E M i.e., E M and CEYLINCO INSURANCE go up and down completely randomly.
Pair Corralation between E M and CEYLINCO INSURANCE
Assuming the 90 days trading horizon E M is expected to generate 2.35 times less return on investment than CEYLINCO INSURANCE. In addition to that, E M is 1.87 times more volatile than CEYLINCO INSURANCE PLC. It trades about 0.01 of its total potential returns per unit of risk. CEYLINCO INSURANCE PLC is currently generating about 0.05 per unit of volatility. If you would invest 104,000 in CEYLINCO INSURANCE PLC on August 24, 2024 and sell it today you would earn a total of 1,000.00 from holding CEYLINCO INSURANCE PLC or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
E M L vs. CEYLINCO INSURANCE PLC
Performance |
| Timeline |
| E M L |
| CEYLINCO INSURANCE PLC |
E M and CEYLINCO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E M and CEYLINCO INSURANCE
The main advantage of trading using opposite E M and CEYLINCO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E M position performs unexpectedly, CEYLINCO 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 CEYLINCO INSURANCE will offset losses from the drop in CEYLINCO INSURANCE's long position.The idea behind E M L and CEYLINCO INSURANCE PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CEYLINCO INSURANCE vs. Jat Holdings PLC | CEYLINCO INSURANCE vs. Lanka Credit and | CEYLINCO INSURANCE vs. Carson Cumberbatch PLC | CEYLINCO INSURANCE vs. Peoples 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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