Correlation Between EX PACK and Sampath Bank

Can any of the company-specific risk be diversified away by investing in both EX PACK and Sampath Bank 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 EX PACK and Sampath Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EX PACK RUGATED CARTONS and Sampath Bank PLC, you can compare the effects of market volatilities on EX PACK and Sampath Bank 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 EX PACK with a short position of Sampath Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of EX PACK and Sampath Bank.

Diversification Opportunities for EX PACK and Sampath Bank

0.0

Correlation Coefficient

EX PACK  Sampath Bank

Pay attention - limited upside

The 3 months correlation between PACKN0000 and Sampath is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EX PACK RUGATED CARTONS and Sampath Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampath Bank PLC and EX PACK 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 EX PACK RUGATED CARTONS are associated (or correlated) with Sampath Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampath Bank PLC has no effect on the direction of EX PACK i.e., EX PACK and Sampath Bank go up and down completely randomly.

Pair Corralation between EX PACK and Sampath Bank

If you would invest  8,550  in Sampath Bank PLC on October 24, 2024 and sell it today you would earn a total of  3,650  from holding Sampath Bank PLC or generate 42.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

EX PACK RUGATED CARTONS  vs.  Sampath Bank PLC

EX PACK RUGATED

Risk-Adjusted Performance

0 of 100

OK

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

Sampath Bank PLC

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sampath Bank PLC are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sampath Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EX PACK and Sampath Bank

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

The idea behind EX PACK RUGATED CARTONS and Sampath Bank PLC 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.