Correlation Between Ceylon Tobacco and Lanka Credit
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By analyzing existing cross correlation between Ceylon Tobacco and Lanka Credit and, you can compare the effects of market volatilities on Ceylon Tobacco 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 Ceylon Tobacco with a short position of Lanka Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Tobacco and Lanka Credit.
Diversification Opportunities for Ceylon Tobacco and Lanka Credit
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ceylon and Lanka is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Tobacco and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit and Ceylon Tobacco 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 Ceylon Tobacco 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 Ceylon Tobacco i.e., Ceylon Tobacco and Lanka Credit go up and down completely randomly.
Pair Corralation between Ceylon Tobacco and Lanka Credit
Assuming the 90 days trading horizon Ceylon Tobacco is expected to generate 0.35 times more return on investment than Lanka Credit. However, Ceylon Tobacco is 2.84 times less risky than Lanka Credit. It trades about 0.16 of its potential returns per unit of risk. Lanka Credit and is currently generating about -0.07 per unit of risk. If you would invest 123,750 in Ceylon Tobacco on August 31, 2024 and sell it today you would earn a total of 3,750 from holding Ceylon Tobacco or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Tobacco vs. Lanka Credit and
Performance |
| Timeline |
| Ceylon Tobacco |
| Lanka Credit |
Ceylon Tobacco and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Tobacco and Lanka Credit
The main advantage of trading using opposite Ceylon Tobacco and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Tobacco 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.| Ceylon Tobacco vs. Arpico Insurance | Ceylon Tobacco vs. Ceylinco Insurance PLC | Ceylon Tobacco vs. Janashakthi Insurance | Ceylon Tobacco vs. Softlogic Life Insurance |
| Lanka Credit vs. Ceylon Guardian Investment | Lanka Credit vs. DFCC Bank PLC | Lanka Credit vs. Renuka Agri Foods | Lanka Credit vs. Distilleries Company of |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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