Correlation Between Ceylon Guardian and Lighthouse Hotel
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By analyzing existing cross correlation between Ceylon Guardian Investment and Lighthouse Hotel PLC, you can compare the effects of market volatilities on Ceylon Guardian and Lighthouse Hotel 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 Ceylon Guardian with a short position of Lighthouse Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Guardian and Lighthouse Hotel.
Diversification Opportunities for Ceylon Guardian and Lighthouse Hotel
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ceylon and Lighthouse is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Guardian Investment and Lighthouse Hotel PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lighthouse Hotel PLC and Ceylon Guardian 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 Ceylon Guardian Investment are associated (or correlated) with Lighthouse Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lighthouse Hotel PLC has no effect on the direction of Ceylon Guardian i.e., Ceylon Guardian and Lighthouse Hotel go up and down completely randomly.
Pair Corralation between Ceylon Guardian and Lighthouse Hotel
Assuming the 90 days trading horizon Ceylon Guardian is expected to generate 2.62 times less return on investment than Lighthouse Hotel. But when comparing it to its historical volatility, Ceylon Guardian Investment is 1.05 times less risky than Lighthouse Hotel. It trades about 0.08 of its potential returns per unit of risk. Lighthouse Hotel PLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,110 in Lighthouse Hotel PLC on August 31, 2024 and sell it today you would earn a total of 1,390 from holding Lighthouse Hotel PLC or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.55% |
| Values | Daily Returns |
Ceylon Guardian Investment vs. Lighthouse Hotel PLC
Performance |
| Timeline |
| Ceylon Guardian Inve |
| Lighthouse Hotel PLC |
Ceylon Guardian and Lighthouse Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Guardian and Lighthouse Hotel
The main advantage of trading using opposite Ceylon Guardian and Lighthouse Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Guardian position performs unexpectedly, Lighthouse Hotel 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 Lighthouse Hotel will offset losses from the drop in Lighthouse Hotel's long position.| Ceylon Guardian vs. HNB Finance | Ceylon Guardian vs. Prime Lands Residencies | Ceylon Guardian vs. Jat Holdings PLC | Ceylon Guardian vs. E M L |
| Lighthouse Hotel vs. Lion Brewery Ceylon | Lighthouse Hotel vs. Amana Bank | Lighthouse Hotel vs. Lanka Milk Foods | Lighthouse Hotel vs. Renuka Agri Foods |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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