Correlation Between Chemanex PLC and Ceylon Hotels
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By analyzing existing cross correlation between Chemanex PLC and Ceylon Hotels, you can compare the effects of market volatilities on Chemanex PLC and Ceylon Hotels 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 Chemanex PLC with a short position of Ceylon Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemanex PLC and Ceylon Hotels.
Diversification Opportunities for Chemanex PLC and Ceylon Hotels
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chemanex and Ceylon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chemanex PLC and Ceylon Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Hotels and Chemanex PLC 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 Chemanex PLC are associated (or correlated) with Ceylon Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Hotels has no effect on the direction of Chemanex PLC i.e., Chemanex PLC and Ceylon Hotels go up and down completely randomly.
Pair Corralation between Chemanex PLC and Ceylon Hotels
Assuming the 90 days trading horizon Chemanex PLC is expected to generate 1.99 times more return on investment than Ceylon Hotels. However, Chemanex PLC is 1.99 times more volatile than Ceylon Hotels. It trades about 0.5 of its potential returns per unit of risk. Ceylon Hotels is currently generating about 0.26 per unit of risk. If you would invest 9,780 in Chemanex PLC on October 10, 2024 and sell it today you would earn a total of 8,120 from holding Chemanex PLC or generate 83.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chemanex PLC vs. Ceylon Hotels
Performance |
Timeline |
Chemanex PLC |
Ceylon Hotels |
Chemanex PLC and Ceylon Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chemanex PLC and Ceylon Hotels
The main advantage of trading using opposite Chemanex PLC and Ceylon Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemanex PLC position performs unexpectedly, Ceylon Hotels 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 Hotels will offset losses from the drop in Ceylon Hotels' long position.Chemanex PLC vs. Tangerine Beach Hotels | Chemanex PLC vs. HATTON NATIONAL BANK | Chemanex PLC vs. Amana Bank | Chemanex PLC vs. Asian Hotels and |
Ceylon Hotels vs. E M L | Ceylon Hotels vs. Lanka Credit and | Ceylon Hotels vs. VIDULLANKA PLC | Ceylon Hotels vs. EX PACK RUGATED CARTONS |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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