Correlation Between Lion Brewery and Lanka Credit
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By analyzing existing cross correlation between Lion Brewery Ceylon and Lanka Credit and, you can compare the effects of market volatilities on Lion Brewery and Lanka Credit 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 Lanka Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Brewery and Lanka Credit.
Diversification Opportunities for Lion Brewery and Lanka Credit
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lion and Lanka is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lion Brewery Ceylon and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit 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 Lanka Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Credit has no effect on the direction of Lion Brewery i.e., Lion Brewery and Lanka Credit go up and down completely randomly.
Pair Corralation between Lion Brewery and Lanka Credit
Assuming the 90 days trading horizon Lion Brewery Ceylon is expected to generate 0.83 times more return on investment than Lanka Credit. However, Lion Brewery Ceylon is 1.2 times less risky than Lanka Credit. It trades about 0.03 of its potential returns per unit of risk. Lanka Credit and is currently generating about -0.07 per unit of risk. If you would invest 108,925 in Lion Brewery Ceylon on September 4, 2024 and sell it today you would earn a total of 1,075 from holding Lion Brewery Ceylon or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Brewery Ceylon vs. Lanka Credit and
Performance |
| Timeline |
| Lion Brewery Ceylon |
| Lanka Credit |
Lion Brewery and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Brewery and Lanka Credit
The main advantage of trading using opposite Lion Brewery and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Brewery position performs unexpectedly, Lanka Credit 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 Credit will offset losses from the drop in Lanka Credit's long position.| Lion Brewery vs. Carson Cumberbatch PLC | Lion Brewery vs. Nations Trust Bank | Lion Brewery vs. Distilleries Company of |
| Lanka Credit vs. Carson Cumberbatch PLC | Lanka Credit vs. Nations Trust Bank | Lanka Credit vs. Distilleries Company of |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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