Correlation Between Keells Food and Tal Lanka
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By analyzing existing cross correlation between Keells Food Products and Tal Lanka Hotels, you can compare the effects of market volatilities on Keells Food and Tal 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 Tal Lanka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keells Food and Tal Lanka.
Diversification Opportunities for Keells Food and Tal Lanka
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Keells and Tal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Keells Food Products and Tal Lanka Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tal Lanka 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 Tal Lanka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tal Lanka Hotels has no effect on the direction of Keells Food i.e., Keells Food and Tal Lanka go up and down completely randomly.
Pair Corralation between Keells Food and Tal Lanka
Assuming the 90 days trading horizon Keells Food is expected to generate 2.45 times less return on investment than Tal Lanka. But when comparing it to its historical volatility, Keells Food Products is 1.69 times less risky than Tal Lanka. It trades about 0.08 of its potential returns per unit of risk. Tal Lanka Hotels is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,770 in Tal Lanka Hotels on November 2, 2024 and sell it today you would earn a total of 630.00 from holding Tal Lanka Hotels or generate 35.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 87.5% |
| Values | Daily Returns |
Keells Food Products vs. Tal Lanka Hotels
Performance |
| Timeline |
| Keells Food Products |
| Tal Lanka Hotels |
Keells Food and Tal Lanka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keells Food and Tal Lanka
The main advantage of trading using opposite Keells Food and Tal Lanka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keells Food position performs unexpectedly, Tal 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 Tal Lanka will offset losses from the drop in Tal Lanka'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 |
| Tal Lanka vs. Janashakthi Insurance | Tal Lanka vs. Renuka Agri Foods | Tal Lanka vs. Hatton National Bank | Tal Lanka vs. Nations Trust Bank |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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