Correlation Between Lanka Milk and Janashakthi Insurance
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By analyzing existing cross correlation between Lanka Milk Foods and Janashakthi Insurance, you can compare the effects of market volatilities on Lanka Milk and Janashakthi 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 Milk with a short position of Janashakthi Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Milk and Janashakthi Insurance.
Diversification Opportunities for Lanka Milk and Janashakthi Insurance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lanka and Janashakthi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Milk Foods and Janashakthi Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janashakthi Insurance and Lanka Milk 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 Milk Foods are associated (or correlated) with Janashakthi Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janashakthi Insurance has no effect on the direction of Lanka Milk i.e., Lanka Milk and Janashakthi Insurance go up and down completely randomly.
Pair Corralation between Lanka Milk and Janashakthi Insurance
Assuming the 90 days trading horizon Lanka Milk is expected to generate 7.55 times less return on investment than Janashakthi Insurance. In addition to that, Lanka Milk is 1.52 times more volatile than Janashakthi Insurance. It trades about 0.01 of its total potential returns per unit of risk. Janashakthi Insurance is currently generating about 0.06 per unit of volatility. If you would invest 2,320 in Janashakthi Insurance on September 2, 2024 and sell it today you would earn a total of 2,430 from holding Janashakthi Insurance or generate 104.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lanka Milk Foods vs. Janashakthi Insurance
Performance |
| Timeline |
| Lanka Milk Foods |
| Janashakthi Insurance |
Lanka Milk and Janashakthi Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Milk and Janashakthi Insurance
The main advantage of trading using opposite Lanka Milk and Janashakthi Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Milk position performs unexpectedly, Janashakthi 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 Janashakthi Insurance will offset losses from the drop in Janashakthi Insurance's long position.| Lanka Milk vs. RENUKA FOODS PLC | Lanka Milk vs. Union Bank | Lanka Milk vs. Hatton National Bank | Lanka Milk vs. Ceylon Cold Stores |
| Janashakthi Insurance vs. Prime Lands Residencies | Janashakthi Insurance vs. VIDULLANKA PLC | Janashakthi Insurance vs. EX PACK RUGATED CARTONS |
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 Correlations module to find global opportunities by holding instruments from different markets.
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