Correlation Between Seylan Bank and Ceylinco Insurance
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By analyzing existing cross correlation between Seylan Bank PLC and Ceylinco Insurance PLC, you can compare the effects of market volatilities on Seylan Bank and Ceylinco Insurance 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 Seylan Bank with a short position of Ceylinco Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seylan Bank and Ceylinco Insurance.
Diversification Opportunities for Seylan Bank and Ceylinco Insurance
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seylan and Ceylinco is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Seylan Bank PLC and Ceylinco Insurance PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylinco Insurance PLC and Seylan 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 Seylan Bank PLC are associated (or correlated) with Ceylinco Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylinco Insurance PLC has no effect on the direction of Seylan Bank i.e., Seylan Bank and Ceylinco Insurance go up and down completely randomly.
Pair Corralation between Seylan Bank and Ceylinco Insurance
Assuming the 90 days trading horizon Seylan Bank PLC is expected to generate 1.42 times more return on investment than Ceylinco Insurance. However, Seylan Bank is 1.42 times more volatile than Ceylinco Insurance PLC. It trades about 0.29 of its potential returns per unit of risk. Ceylinco Insurance PLC is currently generating about 0.35 per unit of risk. If you would invest 5,380 in Seylan Bank PLC on August 31, 2024 and sell it today you would earn a total of 720.00 from holding Seylan Bank PLC or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.0% |
| Values | Daily Returns |
Seylan Bank PLC vs. Ceylinco Insurance PLC
Performance |
| Timeline |
| Seylan Bank PLC |
| Ceylinco Insurance PLC |
Seylan Bank and Ceylinco Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seylan Bank and Ceylinco Insurance
The main advantage of trading using opposite Seylan Bank and Ceylinco Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seylan Bank position performs unexpectedly, Ceylinco Insurance 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 Ceylinco Insurance will offset losses from the drop in Ceylinco Insurance's long position.| Seylan Bank vs. Tal Lanka Hotels | Seylan Bank vs. Serendib Hotels PLC | Seylan Bank vs. Asian Hotels and | Seylan Bank vs. Browns Beach Hotels |
| Ceylinco Insurance vs. HNB Finance | Ceylinco Insurance vs. Prime Lands Residencies | Ceylinco Insurance vs. Jat Holdings PLC | Ceylinco Insurance vs. E M L |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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