Correlation Between Lankem Ceylon and Serendib Hotels
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By analyzing existing cross correlation between Lankem Ceylon PLC and Serendib Hotels PLC, you can compare the effects of market volatilities on Lankem Ceylon and Serendib Hotels 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 Lankem Ceylon with a short position of Serendib Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lankem Ceylon and Serendib Hotels.
Diversification Opportunities for Lankem Ceylon and Serendib Hotels
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lankem and Serendib is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lankem Ceylon PLC and Serendib Hotels PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serendib Hotels PLC and Lankem Ceylon 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 Lankem Ceylon PLC are associated (or correlated) with Serendib Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serendib Hotels PLC has no effect on the direction of Lankem Ceylon i.e., Lankem Ceylon and Serendib Hotels go up and down completely randomly.
Pair Corralation between Lankem Ceylon and Serendib Hotels
Assuming the 90 days trading horizon Lankem Ceylon is expected to generate 5.0 times less return on investment than Serendib Hotels. But when comparing it to its historical volatility, Lankem Ceylon PLC is 1.09 times less risky than Serendib Hotels. It trades about 0.05 of its potential returns per unit of risk. Serendib Hotels PLC is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Serendib Hotels PLC on August 28, 2024 and sell it today you would earn a total of 450.00 from holding Serendib Hotels PLC or generate 35.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lankem Ceylon PLC vs. Serendib Hotels PLC
Performance |
| Timeline |
| Lankem Ceylon PLC |
| Serendib Hotels PLC |
Lankem Ceylon and Serendib Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lankem Ceylon and Serendib Hotels
The main advantage of trading using opposite Lankem Ceylon and Serendib Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lankem Ceylon position performs unexpectedly, Serendib Hotels 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 Serendib Hotels will offset losses from the drop in Serendib Hotels' long position.| Lankem Ceylon vs. HATTON NATIONAL BANK | Lankem Ceylon vs. Lanka Milk Foods | Lankem Ceylon vs. National Development Bank | Lankem Ceylon vs. Seylan Bank PLC |
| Serendib Hotels vs. Keells Food Products | Serendib Hotels vs. SERENDIB HOTELS PLC | Serendib Hotels vs. Lanka Milk Foods | Serendib Hotels vs. Mahaweli Reach Hotel |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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