Correlation Between SERENDIB HOTELS and Merchant Bank
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By analyzing existing cross correlation between SERENDIB HOTELS PLC and Merchant Bank of, you can compare the effects of market volatilities on SERENDIB HOTELS and Merchant 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 SERENDIB HOTELS with a short position of Merchant Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERENDIB HOTELS and Merchant Bank.
Diversification Opportunities for SERENDIB HOTELS and Merchant Bank
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SERENDIB and Merchant is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SERENDIB HOTELS PLC and Merchant Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchant Bank and SERENDIB HOTELS 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 SERENDIB HOTELS PLC are associated (or correlated) with Merchant Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merchant Bank has no effect on the direction of SERENDIB HOTELS i.e., SERENDIB HOTELS and Merchant Bank go up and down completely randomly.
Pair Corralation between SERENDIB HOTELS and Merchant Bank
Assuming the 90 days trading horizon SERENDIB HOTELS PLC is expected to generate 0.79 times more return on investment than Merchant Bank. However, SERENDIB HOTELS PLC is 1.27 times less risky than Merchant Bank. It trades about 0.43 of its potential returns per unit of risk. Merchant Bank of is currently generating about -0.18 per unit of risk. If you would invest 1,000.00 in SERENDIB HOTELS PLC on August 27, 2024 and sell it today you would earn a total of 170.00 from holding SERENDIB HOTELS PLC or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERENDIB HOTELS PLC vs. Merchant Bank of
Performance |
| Timeline |
| SERENDIB HOTELS PLC |
| Merchant Bank |
SERENDIB HOTELS and Merchant Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERENDIB HOTELS and Merchant Bank
The main advantage of trading using opposite SERENDIB HOTELS and Merchant Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERENDIB HOTELS position performs unexpectedly, Merchant 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 Merchant Bank will offset losses from the drop in Merchant Bank's long position.| SERENDIB HOTELS vs. Ceylinco Insurance PLC | SERENDIB HOTELS vs. Hatton National Bank | SERENDIB HOTELS vs. Pan Asia Banking | SERENDIB HOTELS vs. Renuka Agri Foods |
| Merchant Bank vs. Hotel Sigiriya PLC | Merchant Bank vs. SERENDIB HOTELS PLC | Merchant Bank vs. Singhe Hospitals | Merchant Bank vs. Pegasus Hotels of |
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