Correlation Between Merchant Bank and COMMERCIAL BANK
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By analyzing existing cross correlation between Merchant Bank of and COMMERCIAL BANK OF, you can compare the effects of market volatilities on Merchant Bank and COMMERCIAL 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 Merchant Bank with a short position of COMMERCIAL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchant Bank and COMMERCIAL BANK.
Diversification Opportunities for Merchant Bank and COMMERCIAL BANK
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merchant and COMMERCIAL is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Merchant Bank of and COMMERCIAL BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL BANK 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 COMMERCIAL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL BANK has no effect on the direction of Merchant Bank i.e., Merchant Bank and COMMERCIAL BANK go up and down completely randomly.
Pair Corralation between Merchant Bank and COMMERCIAL BANK
Assuming the 90 days trading horizon Merchant Bank of is expected to under-perform the COMMERCIAL BANK. In addition to that, Merchant Bank is 2.21 times more volatile than COMMERCIAL BANK OF. It trades about -0.18 of its total potential returns per unit of risk. COMMERCIAL BANK OF is currently generating about 0.24 per unit of volatility. If you would invest 8,880 in COMMERCIAL BANK OF on August 27, 2024 and sell it today you would earn a total of 450.00 from holding COMMERCIAL BANK OF or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merchant Bank of vs. COMMERCIAL BANK OF
Performance |
| Timeline |
| Merchant Bank |
| COMMERCIAL BANK |
Merchant Bank and COMMERCIAL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchant Bank and COMMERCIAL BANK
The main advantage of trading using opposite Merchant Bank and COMMERCIAL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchant Bank position performs unexpectedly, COMMERCIAL 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 COMMERCIAL BANK will offset losses from the drop in COMMERCIAL BANK's long position.| Merchant Bank vs. Hotel Sigiriya PLC | Merchant Bank vs. SERENDIB HOTELS PLC | Merchant Bank vs. Singhe Hospitals | Merchant Bank vs. Pegasus Hotels of |
| COMMERCIAL BANK vs. ACL Plastics PLC | COMMERCIAL BANK vs. Ceylon Hospitals PLC | COMMERCIAL BANK vs. Browns Beach Hotels | COMMERCIAL BANK vs. SERENDIB HOTELS PLC |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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