Correlation Between Peoples Insurance and Central Industries
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By analyzing existing cross correlation between Peoples Insurance PLC and Central Industries PLC, you can compare the effects of market volatilities on Peoples Insurance and Central Industries 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 Peoples Insurance with a short position of Central Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Central Industries.
Diversification Opportunities for Peoples Insurance and Central Industries
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peoples and Central is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance PLC and Central Industries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industries PLC and Peoples Insurance 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 Peoples Insurance PLC are associated (or correlated) with Central Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industries PLC has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Central Industries go up and down completely randomly.
Pair Corralation between Peoples Insurance and Central Industries
Assuming the 90 days trading horizon Peoples Insurance PLC is expected to generate 1.29 times more return on investment than Central Industries. However, Peoples Insurance is 1.29 times more volatile than Central Industries PLC. It trades about 0.36 of its potential returns per unit of risk. Central Industries PLC is currently generating about 0.16 per unit of risk. If you would invest 2,270 in Peoples Insurance PLC on September 15, 2024 and sell it today you would earn a total of 520.00 from holding Peoples Insurance PLC or generate 22.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Insurance PLC vs. Central Industries PLC
Performance |
| Timeline |
| Peoples Insurance PLC |
| Central Industries PLC |
Peoples Insurance and Central Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and Central Industries
The main advantage of trading using opposite Peoples Insurance and Central Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, Central Industries 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 Central Industries will offset losses from the drop in Central Industries' long position.| Peoples Insurance vs. Ceylinco Insurance PLC | Peoples Insurance vs. Lanka Milk Foods | Peoples Insurance vs. Arpico Insurance | Peoples Insurance vs. Lanka Credit and |
| Central Industries vs. Ceylon Hotels | Central Industries vs. Lanka Milk Foods | Central Industries vs. Peoples Insurance PLC | Central Industries vs. Ceylinco Insurance 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 CEOs Directory module to screen CEOs from public companies around the world.
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