Correlation Between Lion Brewery and Galadari Hotels
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By analyzing existing cross correlation between Lion Brewery Ceylon and Galadari Hotels Lanka, you can compare the effects of market volatilities on Lion Brewery and Galadari Hotels 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 Lion Brewery with a short position of Galadari Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Brewery and Galadari Hotels.
Diversification Opportunities for Lion Brewery and Galadari Hotels
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lion and Galadari is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lion Brewery Ceylon and Galadari Hotels Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galadari Hotels Lanka and Lion Brewery 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 Lion Brewery Ceylon are associated (or correlated) with Galadari Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galadari Hotels Lanka has no effect on the direction of Lion Brewery i.e., Lion Brewery and Galadari Hotels go up and down completely randomly.
Pair Corralation between Lion Brewery and Galadari Hotels
Assuming the 90 days trading horizon Lion Brewery Ceylon is expected to under-perform the Galadari Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Lion Brewery Ceylon is 1.36 times less risky than Galadari Hotels. The stock trades about -0.13 of its potential returns per unit of risk. The Galadari Hotels Lanka is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Galadari Hotels Lanka on August 31, 2024 and sell it today you would earn a total of 120.00 from holding Galadari Hotels Lanka or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Brewery Ceylon vs. Galadari Hotels Lanka
Performance |
| Timeline |
| Lion Brewery Ceylon |
| Galadari Hotels Lanka |
Lion Brewery and Galadari Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Brewery and Galadari Hotels
The main advantage of trading using opposite Lion Brewery and Galadari Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Brewery position performs unexpectedly, Galadari Hotels 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 Galadari Hotels will offset losses from the drop in Galadari Hotels' long position.| Lion Brewery vs. HNB Finance | Lion Brewery vs. Prime Lands Residencies | Lion Brewery vs. Jat Holdings PLC | Lion Brewery vs. E M L |
| Galadari Hotels vs. HNB Finance | Galadari Hotels vs. Prime Lands Residencies | Galadari Hotels vs. Jat Holdings PLC | Galadari Hotels 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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