Correlation Between E M and Sampath Bank
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By analyzing existing cross correlation between E M L and Sampath Bank PLC, you can compare the effects of market volatilities on E M 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 E M with a short position of Sampath Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of E M and Sampath Bank.
Diversification Opportunities for E M and Sampath Bank
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMLN0000 and Sampath is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding E M L 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 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 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 E M i.e., E M and Sampath Bank go up and down completely randomly.
Pair Corralation between E M and Sampath Bank
Assuming the 90 days trading horizon E M L is expected to under-perform the Sampath Bank. In addition to that, E M is 1.71 times more volatile than Sampath Bank PLC. It trades about -0.04 of its total potential returns per unit of risk. Sampath Bank PLC is currently generating about 0.34 per unit of volatility. If you would invest 8,790 in Sampath Bank PLC on September 1, 2024 and sell it today you would earn a total of 990.00 from holding Sampath Bank PLC or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E M L vs. Sampath Bank PLC
Performance |
| Timeline |
| E M L |
| Sampath Bank PLC |
E M and Sampath Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E M and Sampath Bank
The main advantage of trading using opposite E M and Sampath Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E M 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.| E M vs. Prime Lands Residencies | E M vs. Jat Holdings PLC | E M vs. Lanka Credit and | E M vs. VIDULLANKA PLC |
| Sampath Bank vs. Lighthouse Hotel PLC | Sampath Bank vs. Tangerine Beach Hotels | Sampath Bank vs. Galadari Hotels Lanka | Sampath Bank vs. Lanka Realty Investments |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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