Correlation Between Merchant Bank and BROWNS INVESTMENTS
Specify exactly 2 symbols:
By analyzing existing cross correlation between Merchant Bank of and BROWNS INVESTMENTS PLC, you can compare the effects of market volatilities on Merchant Bank and BROWNS INVESTMENTS 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 Merchant Bank with a short position of BROWNS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchant Bank and BROWNS INVESTMENTS.
Diversification Opportunities for Merchant Bank and BROWNS INVESTMENTS
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merchant and BROWNS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Merchant Bank of and BROWNS INVESTMENTS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROWNS INVESTMENTS PLC and Merchant Bank 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 Merchant Bank of are associated (or correlated) with BROWNS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROWNS INVESTMENTS PLC has no effect on the direction of Merchant Bank i.e., Merchant Bank and BROWNS INVESTMENTS go up and down completely randomly.
Pair Corralation between Merchant Bank and BROWNS INVESTMENTS
Assuming the 90 days trading horizon Merchant Bank of is expected to generate 1.51 times more return on investment than BROWNS INVESTMENTS. However, Merchant Bank is 1.51 times more volatile than BROWNS INVESTMENTS PLC. It trades about 0.05 of its potential returns per unit of risk. BROWNS INVESTMENTS PLC is currently generating about 0.02 per unit of risk. If you would invest 340.00 in Merchant Bank of on August 31, 2024 and sell it today you would earn a total of 190.00 from holding Merchant Bank of or generate 55.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Merchant Bank of vs. BROWNS INVESTMENTS PLC
Performance |
| Timeline |
| Merchant Bank |
| BROWNS INVESTMENTS PLC |
Merchant Bank and BROWNS INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchant Bank and BROWNS INVESTMENTS
The main advantage of trading using opposite Merchant Bank and BROWNS INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchant Bank position performs unexpectedly, BROWNS INVESTMENTS 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 BROWNS INVESTMENTS will offset losses from the drop in BROWNS INVESTMENTS's long position.| Merchant Bank vs. Eden Hotel Lanka | Merchant Bank vs. Nuwara Eliya Hotels | Merchant Bank vs. Palm Garden Hotels | Merchant Bank vs. Sri Lanka Telecom |
| BROWNS INVESTMENTS vs. Aitken Spence Hotel | BROWNS INVESTMENTS vs. Lanka Realty Investments | BROWNS INVESTMENTS vs. Keells Food Products | BROWNS INVESTMENTS 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance |