Correlation Between Lanka Milk and Pegasus Hotels
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By analyzing existing cross correlation between Lanka Milk Foods and Pegasus Hotels of, you can compare the effects of market volatilities on Lanka Milk and Pegasus 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 Lanka Milk with a short position of Pegasus Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Milk and Pegasus Hotels.
Diversification Opportunities for Lanka Milk and Pegasus Hotels
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and Pegasus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Milk Foods and Pegasus Hotels of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Hotels 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 Pegasus Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Hotels has no effect on the direction of Lanka Milk i.e., Lanka Milk and Pegasus Hotels go up and down completely randomly.
Pair Corralation between Lanka Milk and Pegasus Hotels
Assuming the 90 days trading horizon Lanka Milk is expected to generate 3.51 times less return on investment than Pegasus Hotels. But when comparing it to its historical volatility, Lanka Milk Foods is 2.43 times less risky than Pegasus Hotels. It trades about 0.15 of its potential returns per unit of risk. Pegasus Hotels of is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,010 in Pegasus Hotels of on August 30, 2024 and sell it today you would earn a total of 590.00 from holding Pegasus Hotels of or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lanka Milk Foods vs. Pegasus Hotels of
Performance |
| Timeline |
| Lanka Milk Foods |
| Pegasus Hotels |
Lanka Milk and Pegasus Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Milk and Pegasus Hotels
The main advantage of trading using opposite Lanka Milk and Pegasus Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Milk position performs unexpectedly, Pegasus 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 Pegasus Hotels will offset losses from the drop in Pegasus Hotels' long position.| Lanka Milk vs. Browns Beach Hotels | Lanka Milk vs. Ceylon Hotels | Lanka Milk vs. Hotel Sigiriya PLC | Lanka Milk vs. Tal Lanka Hotels |
| Pegasus Hotels vs. EX PACK RUGATED CARTONS | Pegasus Hotels vs. PANASIAN POWER PLC | Pegasus Hotels vs. Distilleries Company of | Pegasus Hotels vs. Palm Garden 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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