Correlation Between Lanka Credit and Eden Hotel
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By analyzing existing cross correlation between Lanka Credit and and Eden Hotel Lanka, you can compare the effects of market volatilities on Lanka Credit and Eden Hotel 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 Eden Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Credit and Eden Hotel.
Diversification Opportunities for Lanka Credit and Eden Hotel
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and Eden is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Credit and and Eden Hotel Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eden Hotel Lanka 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 Eden Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eden Hotel Lanka has no effect on the direction of Lanka Credit i.e., Lanka Credit and Eden Hotel go up and down completely randomly.
Pair Corralation between Lanka Credit and Eden Hotel
Assuming the 90 days trading horizon Lanka Credit and is expected to under-perform the Eden Hotel. In addition to that, Lanka Credit is 1.26 times more volatile than Eden Hotel Lanka. It trades about -0.25 of its total potential returns per unit of risk. Eden Hotel Lanka is currently generating about 0.22 per unit of volatility. If you would invest 1,330 in Eden Hotel Lanka on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Eden Hotel Lanka or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Lanka Credit and vs. Eden Hotel Lanka
Performance |
| Timeline |
| Lanka Credit |
| Eden Hotel Lanka |
Lanka Credit and Eden Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Credit and Eden Hotel
The main advantage of trading using opposite Lanka Credit and Eden Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Credit position performs unexpectedly, Eden Hotel 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 Eden Hotel will offset losses from the drop in Eden Hotel's long position.| Lanka Credit vs. Singhe Hospitals | Lanka Credit vs. Tangerine Beach Hotels | Lanka Credit vs. Nuwara Eliya Hotels | Lanka Credit vs. Ceylon Tobacco |
| Eden Hotel vs. Sanasa Development Bank | Eden Hotel vs. HDFC Bank of | Eden Hotel vs. COMMERCIAL BANK OF | Eden Hotel vs. Aitken Spence Hotel |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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