Correlation Between Union Chemicals and Ceylon Hospitals
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By analyzing existing cross correlation between Union Chemicals Lanka and Ceylon Hospitals PLC, you can compare the effects of market volatilities on Union Chemicals and Ceylon Hospitals 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 Union Chemicals with a short position of Ceylon Hospitals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Chemicals and Ceylon Hospitals.
Diversification Opportunities for Union Chemicals and Ceylon Hospitals
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and Ceylon is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Union Chemicals Lanka and Ceylon Hospitals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Hospitals PLC and Union Chemicals 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 Union Chemicals Lanka are associated (or correlated) with Ceylon Hospitals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Hospitals PLC has no effect on the direction of Union Chemicals i.e., Union Chemicals and Ceylon Hospitals go up and down completely randomly.
Pair Corralation between Union Chemicals and Ceylon Hospitals
Assuming the 90 days trading horizon Union Chemicals Lanka is expected to under-perform the Ceylon Hospitals. But the stock apears to be less risky and, when comparing its historical volatility, Union Chemicals Lanka is 5.39 times less risky than Ceylon Hospitals. The stock trades about -0.34 of its potential returns per unit of risk. The Ceylon Hospitals PLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 11,600 in Ceylon Hospitals PLC on August 31, 2024 and sell it today you would lose (175.00) from holding Ceylon Hospitals PLC or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
Union Chemicals Lanka vs. Ceylon Hospitals PLC
Performance |
| Timeline |
| Union Chemicals Lanka |
| Ceylon Hospitals PLC |
Union Chemicals and Ceylon Hospitals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Chemicals and Ceylon Hospitals
The main advantage of trading using opposite Union Chemicals and Ceylon Hospitals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Chemicals position performs unexpectedly, Ceylon Hospitals 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 Ceylon Hospitals will offset losses from the drop in Ceylon Hospitals' long position.| Union Chemicals vs. HATTON NATIONAL BANK | Union Chemicals vs. Citrus Leisure PLC | Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. CEYLINCO INSURANCE PLC |
| Ceylon Hospitals vs. HNB Finance | Ceylon Hospitals vs. Prime Lands Residencies | Ceylon Hospitals vs. Jat Holdings PLC | Ceylon Hospitals vs. E M L |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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