Correlation Between DFCC Bank and Lanka Realty
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By analyzing existing cross correlation between DFCC Bank PLC and Lanka Realty Investments, you can compare the effects of market volatilities on DFCC Bank and Lanka Realty 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 DFCC Bank with a short position of Lanka Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFCC Bank and Lanka Realty.
Diversification Opportunities for DFCC Bank and Lanka Realty
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DFCC and Lanka is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding DFCC Bank PLC and Lanka Realty Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Realty Investments and DFCC Bank 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 DFCC Bank PLC are associated (or correlated) with Lanka Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Realty Investments has no effect on the direction of DFCC Bank i.e., DFCC Bank and Lanka Realty go up and down completely randomly.
Pair Corralation between DFCC Bank and Lanka Realty
Assuming the 90 days trading horizon DFCC Bank PLC is expected to generate 0.51 times more return on investment than Lanka Realty. However, DFCC Bank PLC is 1.95 times less risky than Lanka Realty. It trades about 0.28 of its potential returns per unit of risk. Lanka Realty Investments is currently generating about 0.07 per unit of risk. If you would invest 6,780 in DFCC Bank PLC on September 15, 2024 and sell it today you would earn a total of 2,000 from holding DFCC Bank PLC or generate 29.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DFCC Bank PLC vs. Lanka Realty Investments
Performance |
Timeline |
DFCC Bank PLC |
Lanka Realty Investments |
DFCC Bank and Lanka Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DFCC Bank and Lanka Realty
The main advantage of trading using opposite DFCC Bank and Lanka Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFCC Bank position performs unexpectedly, Lanka Realty 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 Lanka Realty will offset losses from the drop in Lanka Realty's long position.DFCC Bank vs. Lanka Credit and | DFCC Bank vs. VIDULLANKA PLC | DFCC Bank vs. Carson Cumberbatch PLC | DFCC Bank vs. Peoples Insurance PLC |
Lanka Realty vs. Ceylinco Insurance PLC | Lanka Realty vs. Ceylon Guardian Investment | Lanka Realty vs. Colombo Investment Trust | Lanka Realty vs. Union Chemicals Lanka |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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