Correlation Between Peoples Insurance and Keells Food
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By analyzing existing cross correlation between Peoples Insurance PLC and Keells Food Products, you can compare the effects of market volatilities on Peoples Insurance and Keells Food 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 Peoples Insurance with a short position of Keells Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Keells Food.
Diversification Opportunities for Peoples Insurance and Keells Food
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peoples and Keells is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance PLC and Keells Food Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keells Food Products and Peoples Insurance 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 Peoples Insurance PLC are associated (or correlated) with Keells Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keells Food Products has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Keells Food go up and down completely randomly.
Pair Corralation between Peoples Insurance and Keells Food
Assuming the 90 days trading horizon Peoples Insurance PLC is expected to generate 3.04 times more return on investment than Keells Food. However, Peoples Insurance is 3.04 times more volatile than Keells Food Products. It trades about 0.21 of its potential returns per unit of risk. Keells Food Products is currently generating about -0.03 per unit of risk. If you would invest 2,820 in Peoples Insurance PLC on October 20, 2024 and sell it today you would earn a total of 410.00 from holding Peoples Insurance PLC or generate 14.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Peoples Insurance PLC vs. Keells Food Products
Performance |
Timeline |
Peoples Insurance PLC |
Keells Food Products |
Peoples Insurance and Keells Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Peoples Insurance and Keells Food
The main advantage of trading using opposite Peoples Insurance and Keells Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, Keells Food 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 Keells Food will offset losses from the drop in Keells Food's long position.Peoples Insurance vs. Ceylon Tobacco | Peoples Insurance vs. Hotel Sigiriya PLC | Peoples Insurance vs. Union Chemicals Lanka | Peoples Insurance vs. Colombo Investment Trust |
Keells Food vs. Lanka Milk Foods | Keells Food vs. Convenience Foods PLC | Keells Food vs. PEOPLES LEASING FINANCE | Keells Food 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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