Correlation Between Ceylinco Insurance and Lanka Milk
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By analyzing existing cross correlation between Ceylinco Insurance PLC and Lanka Milk Foods, you can compare the effects of market volatilities on Ceylinco Insurance 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 Ceylinco Insurance with a short position of Lanka Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylinco Insurance and Lanka Milk.
Diversification Opportunities for Ceylinco Insurance and Lanka Milk
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ceylinco and Lanka is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ceylinco Insurance 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 Ceylinco 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 Ceylinco Insurance 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 Ceylinco Insurance i.e., Ceylinco Insurance and Lanka Milk go up and down completely randomly.
Pair Corralation between Ceylinco Insurance and Lanka Milk
Assuming the 90 days trading horizon Ceylinco Insurance PLC is expected to generate 0.87 times more return on investment than Lanka Milk. However, Ceylinco Insurance PLC is 1.15 times less risky than Lanka Milk. It trades about 0.35 of its potential returns per unit of risk. Lanka Milk Foods is currently generating about 0.08 per unit of risk. If you would invest 236,400 in Ceylinco Insurance PLC on August 31, 2024 and sell it today you would earn a total of 18,375 from holding Ceylinco Insurance PLC or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.0% |
| Values | Daily Returns |
Ceylinco Insurance PLC vs. Lanka Milk Foods
Performance |
| Timeline |
| Ceylinco Insurance PLC |
| Lanka Milk Foods |
Ceylinco Insurance and Lanka Milk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylinco Insurance and Lanka Milk
The main advantage of trading using opposite Ceylinco Insurance and Lanka Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylinco Insurance 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.| Ceylinco Insurance vs. HNB Finance | Ceylinco Insurance vs. Prime Lands Residencies | Ceylinco Insurance vs. Jat Holdings PLC | Ceylinco Insurance vs. E M L |
| Lanka Milk vs. Tal Lanka Hotels | Lanka Milk vs. Pegasus Hotels of | Lanka Milk vs. Tangerine Beach Hotels | Lanka Milk vs. Renuka Agri Foods |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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