Correlation Between Lanka Credit and Colombo Investment
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By analyzing existing cross correlation between Lanka Credit and and Colombo Investment Trust, you can compare the effects of market volatilities on Lanka Credit and Colombo Investment 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 Lanka Credit with a short position of Colombo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Credit and Colombo Investment.
Diversification Opportunities for Lanka Credit and Colombo Investment
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lanka and Colombo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Credit and and Colombo Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colombo Investment Trust and Lanka Credit 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 Lanka Credit and are associated (or correlated) with Colombo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colombo Investment Trust has no effect on the direction of Lanka Credit i.e., Lanka Credit and Colombo Investment go up and down completely randomly.
Pair Corralation between Lanka Credit and Colombo Investment
Assuming the 90 days trading horizon Lanka Credit and is expected to generate 1.38 times more return on investment than Colombo Investment. However, Lanka Credit is 1.38 times more volatile than Colombo Investment Trust. It trades about 0.28 of its potential returns per unit of risk. Colombo Investment Trust is currently generating about 0.04 per unit of risk. If you would invest 220.00 in Lanka Credit and on September 14, 2024 and sell it today you would earn a total of 40.00 from holding Lanka Credit and or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Lanka Credit and vs. Colombo Investment Trust
Performance |
| Timeline |
| Lanka Credit |
| Colombo Investment Trust |
Lanka Credit and Colombo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Credit and Colombo Investment
The main advantage of trading using opposite Lanka Credit and Colombo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Credit position performs unexpectedly, Colombo Investment 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 Colombo Investment will offset losses from the drop in Colombo Investment's long position.| Lanka Credit vs. Jat Holdings PLC | Lanka Credit vs. VIDULLANKA PLC | Lanka Credit vs. Carson Cumberbatch PLC | Lanka Credit vs. Peoples Insurance PLC |
| Colombo Investment vs. Jat Holdings PLC | Colombo Investment vs. Lanka Credit and | Colombo Investment vs. VIDULLANKA PLC | Colombo Investment vs. Carson Cumberbatch 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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