Correlation Between Lanka Credit and Galadari Hotels
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By analyzing existing cross correlation between Lanka Credit and and Galadari Hotels Lanka, you can compare the effects of market volatilities on Lanka Credit and Galadari Hotels 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 Galadari Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Credit and Galadari Hotels.
Diversification Opportunities for Lanka Credit and Galadari Hotels
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and Galadari is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Credit and and Galadari Hotels Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galadari Hotels Lanka 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 Galadari Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galadari Hotels Lanka has no effect on the direction of Lanka Credit i.e., Lanka Credit and Galadari Hotels go up and down completely randomly.
Pair Corralation between Lanka Credit and Galadari Hotels
Assuming the 90 days trading horizon Lanka Credit and is expected to generate 1.88 times more return on investment than Galadari Hotels. However, Lanka Credit is 1.88 times more volatile than Galadari Hotels Lanka. It trades about 0.07 of its potential returns per unit of risk. Galadari Hotels Lanka is currently generating about 0.02 per unit of risk. If you would invest 170.00 in Lanka Credit and on September 20, 2024 and sell it today you would earn a total of 90.00 from holding Lanka Credit and or generate 52.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.57% |
Values | Daily Returns |
Lanka Credit and vs. Galadari Hotels Lanka
Performance |
Timeline |
Lanka Credit |
Galadari Hotels Lanka |
Lanka Credit and Galadari Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lanka Credit and Galadari Hotels
The main advantage of trading using opposite Lanka Credit and Galadari Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Credit position performs unexpectedly, Galadari Hotels 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 Galadari Hotels will offset losses from the drop in Galadari Hotels' long position.Lanka Credit vs. VIDULLANKA PLC | Lanka Credit vs. Carson Cumberbatch PLC | Lanka Credit vs. Peoples Insurance PLC | Lanka Credit vs. Mahaweli Reach Hotel |
Galadari Hotels vs. Kandy Hotels | Galadari Hotels vs. Janashakthi Insurance | Galadari Hotels vs. Lighthouse Hotel PLC | Galadari Hotels vs. Tangerine Beach Hotels |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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