Correlation Between Asiri Surgical and Ceylon Guardian

Can any of the company-specific risk be diversified away by investing in both Asiri Surgical and Ceylon Guardian at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Asiri Surgical and Ceylon Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asiri Surgical Hospital and Ceylon Guardian Investment, you can compare the effects of market volatilities on Asiri Surgical and Ceylon Guardian 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 Asiri Surgical with a short position of Ceylon Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiri Surgical and Ceylon Guardian.

Diversification Opportunities for Asiri Surgical and Ceylon Guardian

-0.42

Correlation Coefficient

Asiri Surgical  Ceylon Guardian

Very good diversification

The 3 months correlation between Asiri and Ceylon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Asiri Surgical Hospital and Ceylon Guardian Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Guardian Inve and Asiri Surgical 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 Asiri Surgical Hospital are associated (or correlated) with Ceylon Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Guardian Inve has no effect on the direction of Asiri Surgical i.e., Asiri Surgical and Ceylon Guardian go up and down completely randomly.

Pair Corralation between Asiri Surgical and Ceylon Guardian

Assuming the 90 days trading horizon Asiri Surgical Hospital is expected to under-perform the Ceylon Guardian. But the stock apears to be less risky and, when comparing its historical volatility, Asiri Surgical Hospital is 1.39 times less risky than Ceylon Guardian. The stock trades about -0.01 of its potential returns per unit of risk. The Ceylon Guardian Investment is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  9,690  in Ceylon Guardian Investment on September 22, 2024 and sell it today you would earn a total of  3,085  from holding Ceylon Guardian Investment or generate 31.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Asiri Surgical Hospital  vs.  Ceylon Guardian Investment

Asiri Surgical Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asiri Surgical Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Asiri Surgical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ceylon Guardian Inve

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ceylon Guardian Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ceylon Guardian sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asiri Surgical and Ceylon Guardian

The main advantage of trading using opposite Asiri Surgical and Ceylon Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiri Surgical position performs unexpectedly, Ceylon Guardian 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 Guardian will offset losses from the drop in Ceylon Guardian's long position.

The idea behind Asiri Surgical Hospital and Ceylon Guardian Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.