Correlation Between Ceylon Hospitals and Renuka City
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By analyzing existing cross correlation between Ceylon Hospitals PLC and Renuka City Hotel, you can compare the effects of market volatilities on Ceylon Hospitals and Renuka City 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 Hospitals with a short position of Renuka City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hospitals and Renuka City.
Diversification Opportunities for Ceylon Hospitals and Renuka City
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceylon and Renuka is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hospitals PLC and Renuka City Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renuka City Hotel and Ceylon Hospitals 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 Hospitals PLC are associated (or correlated) with Renuka City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renuka City Hotel has no effect on the direction of Ceylon Hospitals i.e., Ceylon Hospitals and Renuka City go up and down completely randomly.
Pair Corralation between Ceylon Hospitals and Renuka City
Assuming the 90 days trading horizon Ceylon Hospitals is expected to generate 14.12 times less return on investment than Renuka City. But when comparing it to its historical volatility, Ceylon Hospitals PLC is 1.37 times less risky than Renuka City. It trades about 0.03 of its potential returns per unit of risk. Renuka City Hotel is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 38,000 in Renuka City Hotel on September 19, 2024 and sell it today you would earn a total of 3,425 from holding Renuka City Hotel or generate 9.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 81.82% |
Values | Daily Returns |
Ceylon Hospitals PLC vs. Renuka City Hotel
Performance |
Timeline |
Ceylon Hospitals PLC |
Renuka City Hotel |
Ceylon Hospitals and Renuka City Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ceylon Hospitals and Renuka City
The main advantage of trading using opposite Ceylon Hospitals and Renuka City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hospitals position performs unexpectedly, Renuka City 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 Renuka City will offset losses from the drop in Renuka City's long position.Ceylon Hospitals vs. Lanka Credit and | Ceylon Hospitals vs. Ceylon Cold Stores | Ceylon Hospitals vs. Union Bank | Ceylon Hospitals vs. Seylan Bank PLC |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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