Correlation Between Lanka Credit and Seylan Bank
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By analyzing existing cross correlation between Lanka Credit and and Seylan Bank PLC, you can compare the effects of market volatilities on Lanka Credit and Seylan 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 Lanka Credit with a short position of Seylan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Credit and Seylan Bank.
Diversification Opportunities for Lanka Credit and Seylan Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and Seylan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Credit and and Seylan Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seylan Bank PLC and Lanka Credit 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 Lanka Credit and are associated (or correlated) with Seylan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seylan Bank PLC has no effect on the direction of Lanka Credit i.e., Lanka Credit and Seylan Bank go up and down completely randomly.
Pair Corralation between Lanka Credit and Seylan Bank
Assuming the 90 days trading horizon Lanka Credit and is expected to under-perform the Seylan Bank. In addition to that, Lanka Credit is 1.17 times more volatile than Seylan Bank PLC. It trades about -0.25 of its total potential returns per unit of risk. Seylan Bank PLC is currently generating about 0.27 per unit of volatility. If you would invest 5,190 in Seylan Bank PLC on August 28, 2024 and sell it today you would earn a total of 620.00 from holding Seylan Bank PLC or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lanka Credit and vs. Seylan Bank PLC
Performance |
| Timeline |
| Lanka Credit |
| Seylan Bank PLC |
Lanka Credit and Seylan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Credit and Seylan Bank
The main advantage of trading using opposite Lanka Credit and Seylan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Credit position performs unexpectedly, Seylan 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 Seylan Bank will offset losses from the drop in Seylan Bank's long position.| Lanka Credit vs. Singhe Hospitals | Lanka Credit vs. Tangerine Beach Hotels | Lanka Credit vs. Nuwara Eliya Hotels | Lanka Credit vs. Ceylon Tobacco |
| Seylan Bank vs. Ceylon Hospitals PLC | Seylan Bank vs. Sigiriya Village Hotels | Seylan Bank vs. Singhe Hospitals | Seylan Bank vs. Ceylon Guardian Investment |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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