Correlation Between Lighthouse Hotel and Lanka Milk
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By analyzing existing cross correlation between Lighthouse Hotel PLC and Lanka Milk Foods, you can compare the effects of market volatilities on Lighthouse Hotel and Lanka Milk 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 Lighthouse Hotel with a short position of Lanka Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lighthouse Hotel and Lanka Milk.
Diversification Opportunities for Lighthouse Hotel and Lanka Milk
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lighthouse and Lanka is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lighthouse Hotel PLC and Lanka Milk Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Milk Foods and Lighthouse Hotel 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 Lighthouse Hotel PLC are associated (or correlated) with Lanka Milk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Milk Foods has no effect on the direction of Lighthouse Hotel i.e., Lighthouse Hotel and Lanka Milk go up and down completely randomly.
Pair Corralation between Lighthouse Hotel and Lanka Milk
Assuming the 90 days trading horizon Lighthouse Hotel PLC is expected to generate 1.66 times more return on investment than Lanka Milk. However, Lighthouse Hotel is 1.66 times more volatile than Lanka Milk Foods. It trades about 0.27 of its potential returns per unit of risk. Lanka Milk Foods is currently generating about 0.08 per unit of risk. If you would invest 4,790 in Lighthouse Hotel PLC on August 31, 2024 and sell it today you would earn a total of 710.00 from holding Lighthouse Hotel PLC or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.0% |
| Values | Daily Returns |
Lighthouse Hotel PLC vs. Lanka Milk Foods
Performance |
| Timeline |
| Lighthouse Hotel PLC |
| Lanka Milk Foods |
Lighthouse Hotel and Lanka Milk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lighthouse Hotel and Lanka Milk
The main advantage of trading using opposite Lighthouse Hotel and Lanka Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lighthouse Hotel position performs unexpectedly, Lanka Milk 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 Lanka Milk will offset losses from the drop in Lanka Milk's long position.| Lighthouse Hotel vs. Lion Brewery Ceylon | Lighthouse Hotel vs. Amana Bank | Lighthouse Hotel vs. Lanka Milk Foods | Lighthouse Hotel vs. Renuka Agri Foods |
| Lanka Milk vs. Tal Lanka Hotels | Lanka Milk vs. Pegasus Hotels of | Lanka Milk vs. Tangerine Beach Hotels | Lanka Milk vs. Renuka Agri Foods |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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