Correlation Between Lanka Milk and Tangerine Beach
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By analyzing existing cross correlation between Lanka Milk Foods and Tangerine Beach Hotels, you can compare the effects of market volatilities on Lanka Milk and Tangerine Beach 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 Tangerine Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Milk and Tangerine Beach.
Diversification Opportunities for Lanka Milk and Tangerine Beach
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lanka and Tangerine is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Milk Foods and Tangerine Beach Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangerine Beach 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 Tangerine Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangerine Beach Hotels has no effect on the direction of Lanka Milk i.e., Lanka Milk and Tangerine Beach go up and down completely randomly.
Pair Corralation between Lanka Milk and Tangerine Beach
Assuming the 90 days trading horizon Lanka Milk is expected to generate 2.46 times less return on investment than Tangerine Beach. In addition to that, Lanka Milk is 1.43 times more volatile than Tangerine Beach Hotels. It trades about 0.01 of its total potential returns per unit of risk. Tangerine Beach Hotels is currently generating about 0.02 per unit of volatility. If you would invest 5,910 in Tangerine Beach Hotels on August 27, 2024 and sell it today you would earn a total of 490.00 from holding Tangerine Beach Hotels or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 79.66% |
| Values | Daily Returns |
Lanka Milk Foods vs. Tangerine Beach Hotels
Performance |
| Timeline |
| Lanka Milk Foods |
| Tangerine Beach Hotels |
Lanka Milk and Tangerine Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanka Milk and Tangerine Beach
The main advantage of trading using opposite Lanka Milk and Tangerine Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Milk position performs unexpectedly, Tangerine Beach 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 Tangerine Beach will offset losses from the drop in Tangerine Beach's long position.| Lanka Milk vs. BROWNS INVESTMENTS PLC | Lanka Milk vs. Distilleries Company of | Lanka Milk vs. Sri Lanka Telecom | Lanka Milk vs. Convenience Foods PLC |
| Tangerine Beach vs. BROWNS INVESTMENTS PLC | Tangerine Beach vs. Sampath Bank PLC | Tangerine Beach vs. RENUKA FOODS PLC | Tangerine Beach vs. SEYLAN BANK PLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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