Correlation Between SEYLAN BANK and Sri Lanka
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By analyzing existing cross correlation between SEYLAN BANK PLC and Sri Lanka Telecom, you can compare the effects of market volatilities on SEYLAN BANK and Sri Lanka 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 Sri Lanka. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEYLAN BANK and Sri Lanka.
Diversification Opportunities for SEYLAN BANK and Sri Lanka
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEYLAN and Sri is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SEYLAN BANK PLC and Sri Lanka Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Lanka Telecom 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 Sri Lanka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Lanka Telecom has no effect on the direction of SEYLAN BANK i.e., SEYLAN BANK and Sri Lanka go up and down completely randomly.
Pair Corralation between SEYLAN BANK and Sri Lanka
Assuming the 90 days trading horizon SEYLAN BANK PLC is expected to generate 1.09 times more return on investment than Sri Lanka. However, SEYLAN BANK is 1.09 times more volatile than Sri Lanka Telecom. It trades about 0.08 of its potential returns per unit of risk. Sri Lanka Telecom is currently generating about 0.01 per unit of risk. If you would invest 1,650 in SEYLAN BANK PLC on August 27, 2024 and sell it today you would earn a total of 2,460 from holding SEYLAN BANK PLC or generate 149.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.37% |
| Values | Daily Returns |
SEYLAN BANK PLC vs. Sri Lanka Telecom
Performance |
| Timeline |
| SEYLAN BANK PLC |
| Sri Lanka Telecom |
SEYLAN BANK and Sri Lanka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEYLAN BANK and Sri Lanka
The main advantage of trading using opposite SEYLAN BANK and Sri Lanka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEYLAN BANK position performs unexpectedly, Sri Lanka 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 Sri Lanka will offset losses from the drop in Sri Lanka's long position.| SEYLAN BANK vs. DFCC Bank PLC | SEYLAN BANK vs. Lanka Credit and | SEYLAN BANK vs. CEYLINCO INSURANCE PLC | SEYLAN BANK vs. Seylan Bank PLC |
| Sri Lanka vs. SEYLAN BANK PLC | Sri Lanka vs. Pan Asia Banking | Sri Lanka vs. Lanka Credit and | Sri Lanka 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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