Correlation Between Amana Bank and Lanka Milk
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By analyzing existing cross correlation between Amana Bank and Lanka Milk Foods, you can compare the effects of market volatilities on Amana Bank and Lanka Milk 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 Amana Bank with a short position of Lanka Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Bank and Lanka Milk.
Diversification Opportunities for Amana Bank and Lanka Milk
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amana and Lanka is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amana Bank and Lanka Milk Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Milk Foods and Amana 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 Amana Bank are associated (or correlated) with Lanka Milk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Milk Foods has no effect on the direction of Amana Bank i.e., Amana Bank and Lanka Milk go up and down completely randomly.
Pair Corralation between Amana Bank and Lanka Milk
Assuming the 90 days trading horizon Amana Bank is expected to generate 8.44 times more return on investment than Lanka Milk. However, Amana Bank is 8.44 times more volatile than Lanka Milk Foods. It trades about 0.05 of its potential returns per unit of risk. Lanka Milk Foods is currently generating about 0.01 per unit of risk. If you would invest 300.00 in Amana Bank on September 2, 2024 and sell it today you would earn a total of 2,020 from holding Amana Bank or generate 673.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Amana Bank vs. Lanka Milk Foods
Performance |
| Timeline |
| Amana Bank |
| Lanka Milk Foods |
Amana Bank and Lanka Milk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amana Bank and Lanka Milk
The main advantage of trading using opposite Amana Bank and Lanka Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Bank position performs unexpectedly, Lanka Milk 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 Milk will offset losses from the drop in Lanka Milk's long position.| Amana Bank vs. Eden Hotel Lanka | Amana Bank vs. Ceylon Hotels | Amana Bank vs. Hotel Sigiriya PLC | Amana Bank vs. John Keells Hotels |
| Lanka Milk vs. RENUKA FOODS PLC | Lanka Milk vs. Union Bank | Lanka Milk vs. Hatton National Bank | Lanka Milk vs. Ceylon Cold Stores |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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