Correlation Between Seylan Bank and Palm Garden
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By analyzing existing cross correlation between Seylan Bank PLC and Palm Garden Hotels, you can compare the effects of market volatilities on Seylan Bank and Palm Garden 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 Palm Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seylan Bank and Palm Garden.
Diversification Opportunities for Seylan Bank and Palm Garden
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Seylan and Palm is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Seylan Bank PLC and Palm Garden Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palm Garden Hotels 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 Palm Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palm Garden Hotels has no effect on the direction of Seylan Bank i.e., Seylan Bank and Palm Garden go up and down completely randomly.
Pair Corralation between Seylan Bank and Palm Garden
Assuming the 90 days trading horizon Seylan Bank PLC is expected to generate 0.7 times more return on investment than Palm Garden. However, Seylan Bank PLC is 1.44 times less risky than Palm Garden. It trades about -0.29 of its potential returns per unit of risk. Palm Garden Hotels is currently generating about -0.3 per unit of risk. If you would invest 8,340 in Seylan Bank PLC on November 28, 2024 and sell it today you would lose (840.00) from holding Seylan Bank PLC or give up 10.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seylan Bank PLC vs. Palm Garden Hotels
Performance |
| Timeline |
| Seylan Bank PLC |
| Palm Garden Hotels |
Seylan Bank and Palm Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seylan Bank and Palm Garden
The main advantage of trading using opposite Seylan Bank and Palm Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seylan Bank position performs unexpectedly, Palm Garden 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 Palm Garden will offset losses from the drop in Palm Garden's long position.| Seylan Bank vs. Union Chemicals Lanka | Seylan Bank vs. Ceylon Guardian Investment | Seylan Bank vs. Colombo Investment Trust | Seylan Bank vs. Ceylon Tobacco |
| Palm Garden vs. Dolphin Hotels PLC | Palm Garden vs. Lanka Realty Investments | Palm Garden vs. SERENDIB HOTELS PLC | Palm Garden vs. PEOPLES LEASING FINANCE |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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