Correlation Between Lanka Milk and Keells Food
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By analyzing existing cross correlation between Lanka Milk Foods and Keells Food Products, you can compare the effects of market volatilities on Lanka Milk and Keells Food 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 Keells Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Milk and Keells Food.
Diversification Opportunities for Lanka Milk and Keells Food
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and Keells is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Milk Foods and Keells Food Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keells Food Products 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 Keells Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keells Food Products has no effect on the direction of Lanka Milk i.e., Lanka Milk and Keells Food go up and down completely randomly.
Pair Corralation between Lanka Milk and Keells Food
Assuming the 90 days trading horizon Lanka Milk Foods is expected to generate 1.18 times more return on investment than Keells Food. However, Lanka Milk is 1.18 times more volatile than Keells Food Products. It trades about 0.24 of its potential returns per unit of risk. Keells Food Products is currently generating about 0.13 per unit of risk. If you would invest 2,410 in Lanka Milk Foods on August 31, 2024 and sell it today you would earn a total of 770.00 from holding Lanka Milk Foods or generate 31.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.97% |
| Values | Daily Returns |
Lanka Milk Foods vs. Keells Food Products
Performance |
| Timeline |
| Lanka Milk Foods |
| Keells Food Products |
Lanka Milk and Keells Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Milk and Keells Food
The main advantage of trading using opposite Lanka Milk and Keells Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Milk position performs unexpectedly, Keells Food 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 Keells Food will offset losses from the drop in Keells Food's long position.| Lanka Milk vs. Tal Lanka Hotels | Lanka Milk vs. Pegasus Hotels of | Lanka Milk vs. Tangerine Beach Hotels | Lanka Milk vs. Renuka Agri Foods |
| Keells Food vs. Tal Lanka Hotels | Keells Food vs. RENUKA FOODS PLC | Keells Food vs. Nuwara Eliya Hotels | Keells Food vs. Kandy Hotels |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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