Correlation Between Sri Lanka and RENUKA FOODS
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By analyzing existing cross correlation between Sri Lanka Telecom and RENUKA FOODS PLC, you can compare the effects of market volatilities on Sri Lanka and RENUKA FOODS 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 Sri Lanka with a short position of RENUKA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Lanka and RENUKA FOODS.
Diversification Opportunities for Sri Lanka and RENUKA FOODS
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sri and RENUKA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sri Lanka Telecom and RENUKA FOODS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENUKA FOODS PLC and Sri Lanka 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 Sri Lanka Telecom are associated (or correlated) with RENUKA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENUKA FOODS PLC has no effect on the direction of Sri Lanka i.e., Sri Lanka and RENUKA FOODS go up and down completely randomly.
Pair Corralation between Sri Lanka and RENUKA FOODS
Assuming the 90 days trading horizon Sri Lanka is expected to generate 4.06 times less return on investment than RENUKA FOODS. But when comparing it to its historical volatility, Sri Lanka Telecom is 1.29 times less risky than RENUKA FOODS. It trades about 0.03 of its potential returns per unit of risk. RENUKA FOODS PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 990.00 in RENUKA FOODS PLC on October 26, 2024 and sell it today you would earn a total of 90.00 from holding RENUKA FOODS PLC or generate 9.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Sri Lanka Telecom vs. RENUKA FOODS PLC
Performance |
Timeline |
Sri Lanka Telecom |
RENUKA FOODS PLC |
Sri Lanka and RENUKA FOODS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sri Lanka and RENUKA FOODS
The main advantage of trading using opposite Sri Lanka and RENUKA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Lanka position performs unexpectedly, RENUKA FOODS 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 RENUKA FOODS will offset losses from the drop in RENUKA FOODS's long position.Sri Lanka vs. Citrus Leisure PLC | Sri Lanka vs. Kandy Hotels | Sri Lanka vs. Ceylon Hospitals PLC | Sri Lanka vs. Dolphin Hotels PLC |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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