Correlation Between Seylan Bank and Janashakthi Insurance
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By analyzing existing cross correlation between Seylan Bank PLC and Janashakthi Insurance, you can compare the effects of market volatilities on Seylan Bank and Janashakthi 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 Janashakthi Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seylan Bank and Janashakthi Insurance.
Diversification Opportunities for Seylan Bank and Janashakthi Insurance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seylan and Janashakthi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Seylan Bank PLC and Janashakthi Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janashakthi Insurance 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 Janashakthi Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janashakthi Insurance has no effect on the direction of Seylan Bank i.e., Seylan Bank and Janashakthi Insurance go up and down completely randomly.
Pair Corralation between Seylan Bank and Janashakthi Insurance
Assuming the 90 days trading horizon Seylan Bank PLC is expected to generate 0.6 times more return on investment than Janashakthi Insurance. However, Seylan Bank PLC is 1.68 times less risky than Janashakthi Insurance. It trades about 0.27 of its potential returns per unit of risk. Janashakthi Insurance is currently generating about 0.1 per unit of risk. If you would invest 5,000 in Seylan Bank PLC on August 24, 2024 and sell it today you would earn a total of 400.00 from holding Seylan Bank PLC or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seylan Bank PLC vs. Janashakthi Insurance
Performance |
| Timeline |
| Seylan Bank PLC |
| Janashakthi Insurance |
Seylan Bank and Janashakthi Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seylan Bank and Janashakthi Insurance
The main advantage of trading using opposite Seylan Bank and Janashakthi Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seylan Bank position performs unexpectedly, Janashakthi 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 Janashakthi Insurance will offset losses from the drop in Janashakthi Insurance's long position.| Seylan Bank vs. John Keells Hotels | Seylan Bank vs. Browns Beach Hotels | Seylan Bank vs. ACL Plastics PLC | Seylan Bank vs. Ceylon Tobacco |
| Janashakthi Insurance vs. Jat Holdings PLC | Janashakthi Insurance vs. Lanka Credit and | Janashakthi Insurance vs. Carson Cumberbatch PLC | Janashakthi Insurance vs. Mahaweli Reach Hotel |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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