Correlation Between ACL Plastics and Lanka Milk
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By analyzing existing cross correlation between ACL Plastics PLC and Lanka Milk Foods, you can compare the effects of market volatilities on ACL Plastics 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 ACL Plastics with a short position of Lanka Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACL Plastics and Lanka Milk.
Diversification Opportunities for ACL Plastics and Lanka Milk
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ACL and Lanka is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding ACL Plastics PLC 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 ACL Plastics 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 ACL Plastics PLC 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 ACL Plastics i.e., ACL Plastics and Lanka Milk go up and down completely randomly.
Pair Corralation between ACL Plastics and Lanka Milk
Assuming the 90 days trading horizon ACL Plastics is expected to generate 1.36 times less return on investment than Lanka Milk. But when comparing it to its historical volatility, ACL Plastics PLC is 2.05 times less risky than Lanka Milk. It trades about 0.23 of its potential returns per unit of risk. Lanka Milk Foods is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,070 in Lanka Milk Foods on August 30, 2024 and sell it today you would earn a total of 160.00 from holding Lanka Milk Foods or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACL Plastics PLC vs. Lanka Milk Foods
Performance |
| Timeline |
| ACL Plastics PLC |
| Lanka Milk Foods |
ACL Plastics and Lanka Milk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACL Plastics and Lanka Milk
The main advantage of trading using opposite ACL Plastics and Lanka Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACL Plastics 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.| ACL Plastics vs. EX PACK RUGATED CARTONS | ACL Plastics vs. PANASIAN POWER PLC | ACL Plastics vs. Distilleries Company of | ACL Plastics vs. Palm Garden Hotels |
| Lanka Milk vs. Browns Beach Hotels | Lanka Milk vs. Ceylon Hotels | Lanka Milk vs. Hotel Sigiriya PLC | Lanka Milk vs. Tal Lanka 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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