Correlation Between Colombo Investment and Lanka Credit
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By analyzing existing cross correlation between Colombo Investment Trust and Lanka Credit and, you can compare the effects of market volatilities on Colombo Investment and Lanka Credit 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 Colombo Investment with a short position of Lanka Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colombo Investment and Lanka Credit.
Diversification Opportunities for Colombo Investment and Lanka Credit
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Colombo and Lanka is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Colombo Investment Trust and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit and Colombo Investment 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 Colombo Investment Trust are associated (or correlated) with Lanka Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Credit has no effect on the direction of Colombo Investment i.e., Colombo Investment and Lanka Credit go up and down completely randomly.
Pair Corralation between Colombo Investment and Lanka Credit
Assuming the 90 days trading horizon Colombo Investment is expected to generate 8.77 times less return on investment than Lanka Credit. But when comparing it to its historical volatility, Colombo Investment Trust is 1.38 times less risky than Lanka Credit. It trades about 0.04 of its potential returns per unit of risk. Lanka Credit and is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Lanka Credit and on September 14, 2024 and sell it today you would earn a total of 40.00 from holding Lanka Credit and or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Colombo Investment Trust vs. Lanka Credit and
Performance |
| Timeline |
| Colombo Investment Trust |
| Lanka Credit |
Colombo Investment and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colombo Investment and Lanka Credit
The main advantage of trading using opposite Colombo Investment and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colombo Investment position performs unexpectedly, Lanka Credit 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 Credit will offset losses from the drop in Lanka Credit's long position.| Colombo Investment vs. Jat Holdings PLC | Colombo Investment vs. Lanka Credit and | Colombo Investment vs. VIDULLANKA PLC | Colombo Investment vs. Carson Cumberbatch PLC |
| Lanka Credit vs. Jat Holdings PLC | Lanka Credit vs. VIDULLANKA PLC | Lanka Credit vs. Carson Cumberbatch PLC | Lanka Credit vs. Peoples Insurance PLC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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