Correlation Between Ceylon Guardian and Nations Trust
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By analyzing existing cross correlation between Ceylon Guardian Investment and Nations Trust Bank, you can compare the effects of market volatilities on Ceylon Guardian and Nations Trust 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 Nations Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Guardian and Nations Trust.
Diversification Opportunities for Ceylon Guardian and Nations Trust
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ceylon and Nations is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Guardian Investment and Nations Trust Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nations Trust Bank 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 Nations Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nations Trust Bank has no effect on the direction of Ceylon Guardian i.e., Ceylon Guardian and Nations Trust go up and down completely randomly.
Pair Corralation between Ceylon Guardian and Nations Trust
Assuming the 90 days trading horizon Ceylon Guardian Investment is expected to under-perform the Nations Trust. In addition to that, Ceylon Guardian is 1.36 times more volatile than Nations Trust Bank. It trades about -0.07 of its total potential returns per unit of risk. Nations Trust Bank is currently generating about 0.36 per unit of volatility. If you would invest 13,825 in Nations Trust Bank on September 1, 2024 and sell it today you would earn a total of 1,425 from holding Nations Trust Bank or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Guardian Investment vs. Nations Trust Bank
Performance |
| Timeline |
| Ceylon Guardian Inve |
| Nations Trust Bank |
Ceylon Guardian and Nations Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Guardian and Nations Trust
The main advantage of trading using opposite Ceylon Guardian and Nations Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Guardian position performs unexpectedly, Nations Trust 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 Nations Trust will offset losses from the drop in Nations Trust's long position.| Ceylon Guardian vs. Lanka Realty Investments | Ceylon Guardian vs. BROWNS INVESTMENTS PLC | Ceylon Guardian vs. Sampath Bank PLC | Ceylon Guardian vs. Union Bank |
| Nations Trust vs. Prime Lands Residencies | Nations Trust vs. Jat Holdings PLC | Nations Trust vs. E M L | Nations Trust vs. Lanka Credit and |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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