Correlation Between Lanka Credit and Peoples Insurance
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By analyzing existing cross correlation between Lanka Credit and and Peoples Insurance PLC, you can compare the effects of market volatilities on Lanka Credit and Peoples Insurance 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 Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Credit and Peoples Insurance.
Diversification Opportunities for Lanka Credit and Peoples Insurance
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and Peoples is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Credit and and Peoples Insurance PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance PLC 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 Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance PLC has no effect on the direction of Lanka Credit i.e., Lanka Credit and Peoples Insurance go up and down completely randomly.
Pair Corralation between Lanka Credit and Peoples Insurance
Assuming the 90 days trading horizon Lanka Credit and is expected to under-perform the Peoples Insurance. In addition to that, Lanka Credit is 2.11 times more volatile than Peoples Insurance PLC. It trades about -0.04 of its total potential returns per unit of risk. Peoples Insurance PLC is currently generating about 0.08 per unit of volatility. If you would invest 2,230 in Peoples Insurance PLC on August 24, 2024 and sell it today you would earn a total of 60.00 from holding Peoples Insurance PLC or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lanka Credit and vs. Peoples Insurance PLC
Performance |
| Timeline |
| Lanka Credit |
| Peoples Insurance PLC |
Lanka Credit and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Credit and Peoples Insurance
The main advantage of trading using opposite Lanka Credit and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Credit position performs unexpectedly, Peoples Insurance 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.| Lanka Credit vs. Carson Cumberbatch PLC | Lanka Credit vs. Mahaweli Reach Hotel | Lanka Credit vs. Lankem Ceylon PLC | Lanka Credit vs. Distilleries Company of |
| Peoples Insurance vs. Lanka Credit and | Peoples Insurance vs. Carson Cumberbatch PLC | Peoples Insurance vs. Mahaweli Reach Hotel | Peoples Insurance vs. Lankem Ceylon 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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