Correlation Between Sanasa Development and SEYLAN BANK
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By analyzing existing cross correlation between Sanasa Development Bank and SEYLAN BANK PLC, you can compare the effects of market volatilities on Sanasa Development and SEYLAN 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 Sanasa Development with a short position of SEYLAN BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanasa Development and SEYLAN BANK.
Diversification Opportunities for Sanasa Development and SEYLAN BANK
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sanasa and SEYLAN is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sanasa Development Bank and SEYLAN BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEYLAN BANK PLC and Sanasa Development 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 Sanasa Development Bank are associated (or correlated) with SEYLAN BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEYLAN BANK PLC has no effect on the direction of Sanasa Development i.e., Sanasa Development and SEYLAN BANK go up and down completely randomly.
Pair Corralation between Sanasa Development and SEYLAN BANK
Assuming the 90 days trading horizon Sanasa Development Bank is expected to under-perform the SEYLAN BANK. But the stock apears to be less risky and, when comparing its historical volatility, Sanasa Development Bank is 1.41 times less risky than SEYLAN BANK. The stock trades about -0.06 of its potential returns per unit of risk. The SEYLAN BANK PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,310 in SEYLAN BANK PLC on September 1, 2024 and sell it today you would earn a total of 30.00 from holding SEYLAN BANK PLC or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanasa Development Bank vs. SEYLAN BANK PLC
Performance |
| Timeline |
| Sanasa Development Bank |
| SEYLAN BANK PLC |
Sanasa Development and SEYLAN BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanasa Development and SEYLAN BANK
The main advantage of trading using opposite Sanasa Development and SEYLAN BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanasa Development position performs unexpectedly, SEYLAN 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 SEYLAN BANK will offset losses from the drop in SEYLAN BANK's long position.| Sanasa Development vs. HVA Foods PLC | Sanasa Development vs. Ceylon Hotels | Sanasa Development vs. Eden Hotel Lanka | Sanasa Development vs. Pegasus Hotels of |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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