Correlation Between Keells Food and Dow Jones
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By analyzing existing cross correlation between Keells Food Products and Dow Jones Industrial, you can compare the effects of market volatilities on Keells Food and Dow Jones 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 Keells Food with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keells Food and Dow Jones.
Diversification Opportunities for Keells Food and Dow Jones
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keells and Dow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Keells Food Products and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Keells Food 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 Keells Food Products are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Keells Food i.e., Keells Food and Dow Jones go up and down completely randomly.
Pair Corralation between Keells Food and Dow Jones
Assuming the 90 days trading horizon Keells Food Products is expected to generate 1.78 times more return on investment than Dow Jones. However, Keells Food is 1.78 times more volatile than Dow Jones Industrial. It trades about 0.23 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 15,375 in Keells Food Products on August 31, 2024 and sell it today you would earn a total of 1,725 from holding Keells Food Products or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Keells Food Products vs. Dow Jones Industrial
Performance |
| Timeline |
Keells Food and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Keells Food Products
Pair trading matchups for Keells Food
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Keells Food and Dow Jones
The main advantage of trading using opposite Keells Food and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keells Food position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Keells Food vs. Tal Lanka Hotels | Keells Food vs. RENUKA FOODS PLC | Keells Food vs. Nuwara Eliya Hotels | Keells Food vs. Kandy Hotels |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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