Correlation Between Merchant Bank and DFCC Bank
Specify exactly 2 symbols:
By analyzing existing cross correlation between Merchant Bank of and DFCC Bank PLC, you can compare the effects of market volatilities on Merchant Bank and DFCC 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 DFCC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchant Bank and DFCC Bank.
Diversification Opportunities for Merchant Bank and DFCC Bank
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Merchant and DFCC is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Merchant Bank of and DFCC Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFCC Bank 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 DFCC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFCC Bank PLC has no effect on the direction of Merchant Bank i.e., Merchant Bank and DFCC Bank go up and down completely randomly.
Pair Corralation between Merchant Bank and DFCC Bank
Assuming the 90 days trading horizon Merchant Bank of is expected to under-perform the DFCC Bank. But the stock apears to be less risky and, when comparing its historical volatility, Merchant Bank of is 1.04 times less risky than DFCC Bank. The stock trades about -0.23 of its potential returns per unit of risk. The DFCC Bank PLC is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 12,775 in DFCC Bank PLC on December 4, 2024 and sell it today you would lose (1,080) from holding DFCC Bank PLC or give up 8.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merchant Bank of vs. DFCC Bank PLC
Performance |
| Timeline |
| Merchant Bank |
| DFCC Bank PLC |
Merchant Bank and DFCC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchant Bank and DFCC Bank
The main advantage of trading using opposite Merchant Bank and DFCC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchant Bank position performs unexpectedly, DFCC 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 DFCC Bank will offset losses from the drop in DFCC Bank's long position.| Merchant Bank vs. Lanka Realty Investments | Merchant Bank vs. Lanka Milk Foods | Merchant Bank vs. Renuka Agri Foods | Merchant Bank vs. Colombo Investment Trust |
| DFCC Bank vs. Colombo Investment Trust | DFCC Bank vs. Lanka Milk Foods | DFCC Bank vs. Renuka Agri Foods | DFCC Bank vs. Convenience Foods 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |