Correlation Between Lighthouse Hotel and Renuka Agri
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By analyzing existing cross correlation between Lighthouse Hotel PLC and Renuka Agri Foods, you can compare the effects of market volatilities on Lighthouse Hotel and Renuka Agri 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 Renuka Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lighthouse Hotel and Renuka Agri.
Diversification Opportunities for Lighthouse Hotel and Renuka Agri
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lighthouse and Renuka is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lighthouse Hotel PLC and Renuka Agri Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renuka Agri 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 Renuka Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renuka Agri Foods has no effect on the direction of Lighthouse Hotel i.e., Lighthouse Hotel and Renuka Agri go up and down completely randomly.
Pair Corralation between Lighthouse Hotel and Renuka Agri
Assuming the 90 days trading horizon Lighthouse Hotel PLC is expected to generate 1.34 times more return on investment than Renuka Agri. However, Lighthouse Hotel is 1.34 times more volatile than Renuka Agri Foods. It trades about 0.27 of its potential returns per unit of risk. Renuka Agri Foods is currently generating about -0.06 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 | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Lighthouse Hotel PLC vs. Renuka Agri Foods
Performance |
| Timeline |
| Lighthouse Hotel PLC |
| Renuka Agri Foods |
Lighthouse Hotel and Renuka Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lighthouse Hotel and Renuka Agri
The main advantage of trading using opposite Lighthouse Hotel and Renuka Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lighthouse Hotel position performs unexpectedly, Renuka Agri 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 Renuka Agri will offset losses from the drop in Renuka Agri'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 |
| Renuka Agri vs. HNB Finance | Renuka Agri vs. Prime Lands Residencies | Renuka Agri vs. Jat Holdings PLC | Renuka Agri vs. E M L |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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