Correlation Between Keells Food and Nations Trust
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By analyzing existing cross correlation between Keells Food Products and Nations Trust Bank, you can compare the effects of market volatilities on Keells Food and Nations Trust 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 Nations Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keells Food and Nations Trust.
Diversification Opportunities for Keells Food and Nations Trust
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keells and Nations is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Keells Food Products and Nations Trust Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nations Trust Bank 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 Nations Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nations Trust Bank has no effect on the direction of Keells Food i.e., Keells Food and Nations Trust go up and down completely randomly.
Pair Corralation between Keells Food and Nations Trust
Assuming the 90 days trading horizon Keells Food is expected to generate 4.92 times less return on investment than Nations Trust. In addition to that, Keells Food is 1.21 times more volatile than Nations Trust Bank. It trades about 0.02 of its total potential returns per unit of risk. Nations Trust Bank is currently generating about 0.13 per unit of volatility. If you would invest 6,650 in Nations Trust Bank on September 1, 2024 and sell it today you would earn a total of 8,600 from holding Nations Trust Bank or generate 129.32% 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. Nations Trust Bank
Performance |
| Timeline |
| Keells Food Products |
| Nations Trust Bank |
Keells Food and Nations Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keells Food and Nations Trust
The main advantage of trading using opposite Keells Food and Nations Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keells Food position performs unexpectedly, Nations Trust 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 Nations Trust will offset losses from the drop in Nations Trust's long position.| Keells Food vs. HNB Finance | Keells Food vs. Prime Lands Residencies | Keells Food vs. Jat Holdings PLC | Keells Food vs. E M L |
| Nations Trust vs. HNB Finance | Nations Trust vs. Prime Lands Residencies | Nations Trust vs. Jat Holdings PLC | Nations Trust 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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