Correlation Between Lanka Credit and Ceylon Tobacco
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By analyzing existing cross correlation between Lanka Credit and and Ceylon Tobacco, you can compare the effects of market volatilities on Lanka Credit and Ceylon Tobacco 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 Lanka Credit with a short position of Ceylon Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Credit and Ceylon Tobacco.
Diversification Opportunities for Lanka Credit and Ceylon Tobacco
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and Ceylon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Credit and and Ceylon Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Tobacco and Lanka Credit 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 Lanka Credit and are associated (or correlated) with Ceylon Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Tobacco has no effect on the direction of Lanka Credit i.e., Lanka Credit and Ceylon Tobacco go up and down completely randomly.
Pair Corralation between Lanka Credit and Ceylon Tobacco
Assuming the 90 days trading horizon Lanka Credit and is expected to generate 3.7 times more return on investment than Ceylon Tobacco. However, Lanka Credit is 3.7 times more volatile than Ceylon Tobacco. It trades about 0.44 of its potential returns per unit of risk. Ceylon Tobacco is currently generating about 0.28 per unit of risk. If you would invest 210.00 in Lanka Credit and on September 25, 2024 and sell it today you would earn a total of 60.00 from holding Lanka Credit and or generate 28.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lanka Credit and vs. Ceylon Tobacco
Performance |
Timeline |
Lanka Credit |
Ceylon Tobacco |
Lanka Credit and Ceylon Tobacco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lanka Credit and Ceylon Tobacco
The main advantage of trading using opposite Lanka Credit and Ceylon Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Credit position performs unexpectedly, Ceylon Tobacco 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 Tobacco will offset losses from the drop in Ceylon Tobacco's long position.Lanka Credit vs. HNB Finance | Lanka Credit vs. Prime Lands Residencies | Lanka Credit vs. Jat Holdings PLC | Lanka Credit vs. VIDULLANKA PLC |
Ceylon Tobacco vs. HNB Finance | Ceylon Tobacco vs. Prime Lands Residencies | Ceylon Tobacco vs. Jat Holdings PLC | Ceylon Tobacco vs. Lanka Credit and |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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