Correlation Between Janashakthi Insurance and Lion Brewery
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By analyzing existing cross correlation between Janashakthi Insurance and Lion Brewery Ceylon, you can compare the effects of market volatilities on Janashakthi Insurance and Lion Brewery 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 Janashakthi Insurance with a short position of Lion Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janashakthi Insurance and Lion Brewery.
Diversification Opportunities for Janashakthi Insurance and Lion Brewery
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Janashakthi and Lion is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Janashakthi Insurance and Lion Brewery Ceylon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Brewery Ceylon and Janashakthi 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 Janashakthi Insurance are associated (or correlated) with Lion Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Brewery Ceylon has no effect on the direction of Janashakthi Insurance i.e., Janashakthi Insurance and Lion Brewery go up and down completely randomly.
Pair Corralation between Janashakthi Insurance and Lion Brewery
Assuming the 90 days trading horizon Janashakthi Insurance is expected to generate 1.47 times more return on investment than Lion Brewery. However, Janashakthi Insurance is 1.47 times more volatile than Lion Brewery Ceylon. It trades about 0.03 of its potential returns per unit of risk. Lion Brewery Ceylon is currently generating about -0.13 per unit of risk. If you would invest 4,460 in Janashakthi Insurance on August 31, 2024 and sell it today you would earn a total of 50.00 from holding Janashakthi Insurance or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janashakthi Insurance vs. Lion Brewery Ceylon
Performance |
| Timeline |
| Janashakthi Insurance |
| Lion Brewery Ceylon |
Janashakthi Insurance and Lion Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janashakthi Insurance and Lion Brewery
The main advantage of trading using opposite Janashakthi Insurance and Lion Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janashakthi Insurance position performs unexpectedly, Lion Brewery 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 Lion Brewery will offset losses from the drop in Lion Brewery's long position.| Janashakthi Insurance vs. HNB Finance | Janashakthi Insurance vs. Prime Lands Residencies | Janashakthi Insurance vs. Jat Holdings PLC | Janashakthi Insurance vs. E M L |
| Lion Brewery vs. HNB Finance | Lion Brewery vs. Prime Lands Residencies | Lion Brewery vs. Jat Holdings PLC | Lion Brewery vs. E M L |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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