Correlation Between SEYLAN BANK and Union Bank
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By analyzing existing cross correlation between SEYLAN BANK PLC and Union Bank, you can compare the effects of market volatilities on SEYLAN BANK and Union 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 SEYLAN BANK with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEYLAN BANK and Union Bank.
Diversification Opportunities for SEYLAN BANK and Union Bank
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEYLAN and Union is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SEYLAN BANK PLC and Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank 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 Union Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bank has no effect on the direction of SEYLAN BANK i.e., SEYLAN BANK and Union Bank go up and down completely randomly.
Pair Corralation between SEYLAN BANK and Union Bank
Assuming the 90 days trading horizon SEYLAN BANK PLC is expected to generate 1.34 times more return on investment than Union Bank. However, SEYLAN BANK is 1.34 times more volatile than Union Bank. It trades about 0.1 of its potential returns per unit of risk. Union Bank is currently generating about 0.04 per unit of risk. If you would invest 1,940 in SEYLAN BANK PLC on September 19, 2024 and sell it today you would earn a total of 2,890 from holding SEYLAN BANK PLC or generate 148.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEYLAN BANK PLC vs. Union Bank
Performance |
| Timeline |
| SEYLAN BANK PLC |
| Union Bank |
SEYLAN BANK and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEYLAN BANK and Union Bank
The main advantage of trading using opposite SEYLAN BANK and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEYLAN BANK position performs unexpectedly, Union 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 Union Bank will offset losses from the drop in Union Bank's long position.| SEYLAN BANK vs. Hatton National Bank | SEYLAN BANK vs. Convenience Foods PLC | SEYLAN BANK vs. Amaya Leisure PLC | SEYLAN BANK vs. HATTON NATIONAL BANK |
| Union Bank vs. Lanka Credit and | Union Bank vs. VIDULLANKA PLC | Union Bank vs. Carson Cumberbatch PLC | Union Bank 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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