Correlation Between Sampath Bank and Ceylon Hotels
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By analyzing existing cross correlation between Sampath Bank PLC and Ceylon Hotels, you can compare the effects of market volatilities on Sampath Bank and Ceylon 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 Sampath Bank with a short position of Ceylon Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampath Bank and Ceylon Hotels.
Diversification Opportunities for Sampath Bank and Ceylon Hotels
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sampath and Ceylon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sampath Bank PLC and Ceylon Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Hotels and Sampath 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 Sampath Bank PLC are associated (or correlated) with Ceylon Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Hotels has no effect on the direction of Sampath Bank i.e., Sampath Bank and Ceylon Hotels go up and down completely randomly.
Pair Corralation between Sampath Bank and Ceylon Hotels
Assuming the 90 days trading horizon Sampath Bank PLC is expected to generate 0.64 times more return on investment than Ceylon Hotels. However, Sampath Bank PLC is 1.55 times less risky than Ceylon Hotels. It trades about 0.39 of its potential returns per unit of risk. Ceylon Hotels is currently generating about 0.16 per unit of risk. If you would invest 7,900 in Sampath Bank PLC on September 3, 2024 and sell it today you would earn a total of 1,880 from holding Sampath Bank PLC or generate 23.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampath Bank PLC vs. Ceylon Hotels
Performance |
| Timeline |
| Sampath Bank PLC |
| Ceylon Hotels |
Sampath Bank and Ceylon Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampath Bank and Ceylon Hotels
The main advantage of trading using opposite Sampath Bank and Ceylon Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampath Bank position performs unexpectedly, Ceylon 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 Ceylon Hotels will offset losses from the drop in Ceylon Hotels' long position.| Sampath Bank vs. Lanka Credit and | Sampath Bank vs. VIDULLANKA PLC | Sampath Bank vs. Carson Cumberbatch PLC | Sampath Bank vs. Peoples Insurance PLC |
| Ceylon Hotels vs. Lanka Credit and | Ceylon Hotels vs. VIDULLANKA PLC | Ceylon Hotels vs. Carson Cumberbatch PLC | Ceylon Hotels vs. Peoples 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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