Correlation Between Keells Food and Kandy Hotels
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By analyzing existing cross correlation between Keells Food Products and Kandy Hotels, you can compare the effects of market volatilities on Keells Food and Kandy Hotels 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 Kandy Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keells Food and Kandy Hotels.
Diversification Opportunities for Keells Food and Kandy Hotels
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Keells and Kandy is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Keells Food Products and Kandy Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandy Hotels 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 Kandy Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandy Hotels has no effect on the direction of Keells Food i.e., Keells Food and Kandy Hotels go up and down completely randomly.
Pair Corralation between Keells Food and Kandy Hotels
Assuming the 90 days trading horizon Keells Food is expected to generate 2.26 times less return on investment than Kandy Hotels. But when comparing it to its historical volatility, Keells Food Products is 1.21 times less risky than Kandy Hotels. It trades about 0.02 of its potential returns per unit of risk. Kandy Hotels is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 720.00 in Kandy Hotels on August 27, 2024 and sell it today you would earn a total of 160.00 from holding Kandy Hotels or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.17% |
| Values | Daily Returns |
Keells Food Products vs. Kandy Hotels
Performance |
| Timeline |
| Keells Food Products |
| Kandy Hotels |
Keells Food and Kandy Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keells Food and Kandy Hotels
The main advantage of trading using opposite Keells Food and Kandy Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keells Food position performs unexpectedly, Kandy Hotels 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 Kandy Hotels will offset losses from the drop in Kandy Hotels' long position.| Keells Food vs. Kandy Hotels | Keells Food vs. RENUKA FOODS PLC | Keells Food vs. Lanka Realty Investments | Keells Food vs. Nuwara Eliya Hotels |
| Kandy Hotels vs. COMMERCIAL BANK OF | Kandy Hotels vs. Convenience Foods PLC | Kandy Hotels vs. Sampath Bank PLC | Kandy Hotels vs. HVA Foods 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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