Correlation Between Renuka Agri and SEYLAN BANK
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By analyzing existing cross correlation between Renuka Agri Foods and SEYLAN BANK PLC, you can compare the effects of market volatilities on Renuka Agri and SEYLAN 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 Renuka Agri with a short position of SEYLAN BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renuka Agri and SEYLAN BANK.
Diversification Opportunities for Renuka Agri and SEYLAN BANK
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Renuka and SEYLAN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Renuka Agri Foods and SEYLAN BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEYLAN BANK PLC and Renuka Agri 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 Renuka Agri Foods are associated (or correlated) with SEYLAN BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEYLAN BANK PLC has no effect on the direction of Renuka Agri i.e., Renuka Agri and SEYLAN BANK go up and down completely randomly.
Pair Corralation between Renuka Agri and SEYLAN BANK
Assuming the 90 days trading horizon Renuka Agri is expected to generate 1.28 times less return on investment than SEYLAN BANK. In addition to that, Renuka Agri is 1.59 times more volatile than SEYLAN BANK PLC. It trades about 0.13 of its total potential returns per unit of risk. SEYLAN BANK PLC is currently generating about 0.27 per unit of volatility. If you would invest 3,400 in SEYLAN BANK PLC on September 15, 2024 and sell it today you would earn a total of 1,190 from holding SEYLAN BANK PLC or generate 35.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Renuka Agri Foods vs. SEYLAN BANK PLC
Performance |
Timeline |
Renuka Agri Foods |
SEYLAN BANK PLC |
Renuka Agri and SEYLAN BANK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Renuka Agri and SEYLAN BANK
The main advantage of trading using opposite Renuka Agri and SEYLAN BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renuka Agri position performs unexpectedly, SEYLAN 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 SEYLAN BANK will offset losses from the drop in SEYLAN BANK's long position.Renuka Agri vs. Lanka Credit and | Renuka Agri vs. VIDULLANKA PLC | Renuka Agri vs. Carson Cumberbatch PLC | Renuka Agri vs. Peoples Insurance 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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