Correlation Between Elpitiya Plantations and Lanka Credit
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By analyzing existing cross correlation between Elpitiya Plantations PLC and Lanka Credit and, you can compare the effects of market volatilities on Elpitiya Plantations 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 Elpitiya Plantations with a short position of Lanka Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elpitiya Plantations and Lanka Credit.
Diversification Opportunities for Elpitiya Plantations and Lanka Credit
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elpitiya and Lanka is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Elpitiya Plantations PLC and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit and Elpitiya Plantations 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 Elpitiya Plantations PLC 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 Elpitiya Plantations i.e., Elpitiya Plantations and Lanka Credit go up and down completely randomly.
Pair Corralation between Elpitiya Plantations and Lanka Credit
Assuming the 90 days trading horizon Elpitiya Plantations PLC is expected to generate 0.44 times more return on investment than Lanka Credit. However, Elpitiya Plantations PLC is 2.25 times less risky than Lanka Credit. It trades about 0.05 of its potential returns per unit of risk. Lanka Credit and is currently generating about 0.01 per unit of risk. If you would invest 8,880 in Elpitiya Plantations PLC on September 12, 2024 and sell it today you would earn a total of 2,070 from holding Elpitiya Plantations PLC or generate 23.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Elpitiya Plantations PLC vs. Lanka Credit and
Performance |
| Timeline |
| Elpitiya Plantations PLC |
| Lanka Credit |
Elpitiya Plantations and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elpitiya Plantations and Lanka Credit
The main advantage of trading using opposite Elpitiya Plantations and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elpitiya Plantations 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.| Elpitiya Plantations vs. Tangerine Beach Hotels | Elpitiya Plantations vs. Eden Hotel Lanka | Elpitiya Plantations vs. Serendib Hotels PLC | Elpitiya Plantations vs. Sri Lanka Telecom |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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