Correlation Between Colombo Investment and Ceylon Beverage
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By analyzing existing cross correlation between Colombo Investment Trust and Ceylon Beverage Holdings, you can compare the effects of market volatilities on Colombo Investment and Ceylon Beverage 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 Colombo Investment with a short position of Ceylon Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colombo Investment and Ceylon Beverage.
Diversification Opportunities for Colombo Investment and Ceylon Beverage
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Colombo and Ceylon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Colombo Investment Trust and Ceylon Beverage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Beverage Holdings and Colombo Investment 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 Colombo Investment Trust are associated (or correlated) with Ceylon Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Beverage Holdings has no effect on the direction of Colombo Investment i.e., Colombo Investment and Ceylon Beverage go up and down completely randomly.
Pair Corralation between Colombo Investment and Ceylon Beverage
Assuming the 90 days trading horizon Colombo Investment is expected to generate 2.47 times less return on investment than Ceylon Beverage. But when comparing it to its historical volatility, Colombo Investment Trust is 1.3 times less risky than Ceylon Beverage. It trades about 0.14 of its potential returns per unit of risk. Ceylon Beverage Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 190,000 in Ceylon Beverage Holdings on September 14, 2024 and sell it today you would earn a total of 94,825 from holding Ceylon Beverage Holdings or generate 49.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 91.18% |
Values | Daily Returns |
Colombo Investment Trust vs. Ceylon Beverage Holdings
Performance |
Timeline |
Colombo Investment Trust |
Ceylon Beverage Holdings |
Colombo Investment and Ceylon Beverage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Colombo Investment and Ceylon Beverage
The main advantage of trading using opposite Colombo Investment and Ceylon Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colombo Investment position performs unexpectedly, Ceylon Beverage 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 Beverage will offset losses from the drop in Ceylon Beverage's long position.Colombo Investment vs. Jat Holdings PLC | Colombo Investment vs. Lanka Credit and | Colombo Investment vs. VIDULLANKA PLC | Colombo Investment vs. Carson Cumberbatch 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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