Correlation Between Kelani Cables and Union Chemicals
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By analyzing existing cross correlation between Kelani Cables PLC and Union Chemicals Lanka, you can compare the effects of market volatilities on Kelani Cables and Union Chemicals 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 Kelani Cables with a short position of Union Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelani Cables and Union Chemicals.
Diversification Opportunities for Kelani Cables and Union Chemicals
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kelani and Union is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kelani Cables PLC and Union Chemicals Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Chemicals Lanka and Kelani Cables 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 Kelani Cables PLC are associated (or correlated) with Union Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Chemicals Lanka has no effect on the direction of Kelani Cables i.e., Kelani Cables and Union Chemicals go up and down completely randomly.
Pair Corralation between Kelani Cables and Union Chemicals
Assuming the 90 days trading horizon Kelani Cables PLC is expected to generate 0.79 times more return on investment than Union Chemicals. However, Kelani Cables PLC is 1.27 times less risky than Union Chemicals. It trades about 0.2 of its potential returns per unit of risk. Union Chemicals Lanka is currently generating about 0.06 per unit of risk. If you would invest 28,000 in Kelani Cables PLC on August 30, 2024 and sell it today you would earn a total of 6,300 from holding Kelani Cables PLC or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.67% |
| Values | Daily Returns |
Kelani Cables PLC vs. Union Chemicals Lanka
Performance |
| Timeline |
| Kelani Cables PLC |
| Union Chemicals Lanka |
Kelani Cables and Union Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelani Cables and Union Chemicals
The main advantage of trading using opposite Kelani Cables and Union Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelani Cables position performs unexpectedly, Union Chemicals 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 Union Chemicals will offset losses from the drop in Union Chemicals' long position.| Kelani Cables vs. Renuka Agri Foods | Kelani Cables vs. Carson Cumberbatch PLC | Kelani Cables vs. DFCC Bank PLC | Kelani Cables vs. Peoples Insurance PLC |
| Union Chemicals vs. HATTON NATIONAL BANK | Union Chemicals vs. Citrus Leisure PLC | Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. CEYLINCO 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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