Correlation Between Keells Food and John Keells
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By analyzing existing cross correlation between Keells Food Products and John Keells Hotels, you can compare the effects of market volatilities on Keells Food and John Keells 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 John Keells. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keells Food and John Keells.
Diversification Opportunities for Keells Food and John Keells
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keells and John is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Keells Food Products and John Keells Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Keells 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 John Keells. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Keells Hotels has no effect on the direction of Keells Food i.e., Keells Food and John Keells go up and down completely randomly.
Pair Corralation between Keells Food and John Keells
Assuming the 90 days trading horizon Keells Food Products is expected to generate 1.39 times more return on investment than John Keells. However, Keells Food is 1.39 times more volatile than John Keells Hotels. It trades about 0.02 of its potential returns per unit of risk. John Keells Hotels is currently generating about 0.03 per unit of risk. If you would invest 16,000 in Keells Food Products on August 31, 2024 and sell it today you would earn a total of 1,100 from holding Keells Food Products or generate 6.88% 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. John Keells Hotels
Performance |
| Timeline |
| Keells Food Products |
| John Keells Hotels |
Keells Food and John Keells Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keells Food and John Keells
The main advantage of trading using opposite Keells Food and John Keells positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keells Food position performs unexpectedly, John Keells 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 John Keells will offset losses from the drop in John Keells' 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 |
| John Keells vs. Tangerine Beach Hotels | John Keells vs. BROWNS INVESTMENTS PLC | John Keells vs. Ceylon Hotels | John Keells vs. Sri Lanka Telecom |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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