Correlation Between Ceylon Cold and Hotel Sigiriya
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By analyzing existing cross correlation between Ceylon Cold Stores and Hotel Sigiriya PLC, you can compare the effects of market volatilities on Ceylon Cold and Hotel Sigiriya 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 Ceylon Cold with a short position of Hotel Sigiriya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Cold and Hotel Sigiriya.
Diversification Opportunities for Ceylon Cold and Hotel Sigiriya
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ceylon and Hotel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Cold Stores and Hotel Sigiriya PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sigiriya PLC and Ceylon Cold 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 Ceylon Cold Stores are associated (or correlated) with Hotel Sigiriya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sigiriya PLC has no effect on the direction of Ceylon Cold i.e., Ceylon Cold and Hotel Sigiriya go up and down completely randomly.
Pair Corralation between Ceylon Cold and Hotel Sigiriya
Assuming the 90 days trading horizon Ceylon Cold is expected to generate 2.27 times less return on investment than Hotel Sigiriya. But when comparing it to its historical volatility, Ceylon Cold Stores is 1.8 times less risky than Hotel Sigiriya. It trades about 0.25 of its potential returns per unit of risk. Hotel Sigiriya PLC is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,390 in Hotel Sigiriya PLC on September 15, 2024 and sell it today you would earn a total of 3,180 from holding Hotel Sigiriya PLC or generate 72.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ceylon Cold Stores vs. Hotel Sigiriya PLC
Performance |
Timeline |
Ceylon Cold Stores |
Hotel Sigiriya PLC |
Ceylon Cold and Hotel Sigiriya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ceylon Cold and Hotel Sigiriya
The main advantage of trading using opposite Ceylon Cold and Hotel Sigiriya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Cold position performs unexpectedly, Hotel Sigiriya 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 Hotel Sigiriya will offset losses from the drop in Hotel Sigiriya's long position.Ceylon Cold vs. Amaya Leisure PLC | Ceylon Cold vs. Browns Beach Hotels | Ceylon Cold vs. BROWNS INVESTMENTS PLC | Ceylon Cold vs. Aitken Spence Hotel |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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