Correlation Between Lanka Milk and EX PACK
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By analyzing existing cross correlation between Lanka Milk Foods and EX PACK RUGATED CARTONS, you can compare the effects of market volatilities on Lanka Milk and EX PACK 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 Milk with a short position of EX PACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Milk and EX PACK.
Diversification Opportunities for Lanka Milk and EX PACK
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and PACKN0000 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Milk Foods and EX PACK RUGATED CARTONS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EX PACK RUGATED and Lanka Milk 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 Milk Foods are associated (or correlated) with EX PACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EX PACK RUGATED has no effect on the direction of Lanka Milk i.e., Lanka Milk and EX PACK go up and down completely randomly.
Pair Corralation between Lanka Milk and EX PACK
Assuming the 90 days trading horizon Lanka Milk Foods is expected to generate 1.75 times more return on investment than EX PACK. However, Lanka Milk is 1.75 times more volatile than EX PACK RUGATED CARTONS. It trades about 0.3 of its potential returns per unit of risk. EX PACK RUGATED CARTONS is currently generating about 0.14 per unit of risk. If you would invest 2,990 in Lanka Milk Foods on October 10, 2024 and sell it today you would earn a total of 1,820 from holding Lanka Milk Foods or generate 60.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lanka Milk Foods vs. EX PACK RUGATED CARTONS
Performance |
Timeline |
Lanka Milk Foods |
EX PACK RUGATED |
Lanka Milk and EX PACK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lanka Milk and EX PACK
The main advantage of trading using opposite Lanka Milk and EX PACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Milk position performs unexpectedly, EX PACK 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 EX PACK will offset losses from the drop in EX PACK's long position.Lanka Milk vs. CEYLINCO INSURANCE PLC | Lanka Milk vs. PEOPLES LEASING FINANCE | Lanka Milk vs. Ceylinco Insurance PLC | Lanka Milk vs. Lion Brewery Ceylon |
EX PACK vs. CEYLINCO INSURANCE PLC | EX PACK vs. Lanka Milk Foods | EX PACK vs. Softlogic Life Insurance | EX PACK vs. Sri Lanka Telecom |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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