Correlation Between Keells Food and Sri Lanka
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By analyzing existing cross correlation between Keells Food Products and Sri Lanka Telecom, you can compare the effects of market volatilities on Keells Food and Sri Lanka 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 Sri Lanka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keells Food and Sri Lanka.
Diversification Opportunities for Keells Food and Sri Lanka
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Keells and Sri is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Keells Food Products and Sri Lanka Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Lanka Telecom 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 Sri Lanka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Lanka Telecom has no effect on the direction of Keells Food i.e., Keells Food and Sri Lanka go up and down completely randomly.
Pair Corralation between Keells Food and Sri Lanka
Assuming the 90 days trading horizon Keells Food Products is expected to generate 1.31 times more return on investment than Sri Lanka. However, Keells Food is 1.31 times more volatile than Sri Lanka Telecom. It trades about 0.03 of its potential returns per unit of risk. Sri Lanka Telecom is currently generating about -0.08 per unit of risk. If you would invest 16,200 in Keells Food Products on September 14, 2024 and sell it today you would earn a total of 1,325 from holding Keells Food Products or generate 8.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.95% |
| Values | Daily Returns |
Keells Food Products vs. Sri Lanka Telecom
Performance |
| Timeline |
| Keells Food Products |
| Sri Lanka Telecom |
Keells Food and Sri Lanka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keells Food and Sri Lanka
The main advantage of trading using opposite Keells Food and Sri Lanka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keells Food position performs unexpectedly, Sri Lanka 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 Sri Lanka will offset losses from the drop in Sri Lanka's long position.| Keells Food vs. Hotel Sigiriya PLC | Keells Food vs. Aitken Spence Hotel | Keells Food vs. Sri Lanka Telecom | Keells Food vs. Palm Garden Hotels |
| Sri Lanka vs. Tal Lanka Hotels | Sri Lanka vs. Keells Food Products | Sri Lanka vs. Convenience Foods PLC | Sri Lanka vs. Lanka Realty Investments |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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