Correlation Between National Development and Lanka Realty
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By analyzing existing cross correlation between National Development Bank and Lanka Realty Investments, you can compare the effects of market volatilities on National Development and Lanka Realty 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 National Development with a short position of Lanka Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Development and Lanka Realty.
Diversification Opportunities for National Development and Lanka Realty
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Lanka is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding National Development Bank and Lanka Realty Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Realty Investments and National Development 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 National Development Bank are associated (or correlated) with Lanka Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Realty Investments has no effect on the direction of National Development i.e., National Development and Lanka Realty go up and down completely randomly.
Pair Corralation between National Development and Lanka Realty
Assuming the 90 days trading horizon National Development Bank is expected to generate 0.69 times more return on investment than Lanka Realty. However, National Development Bank is 1.46 times less risky than Lanka Realty. It trades about -0.16 of its potential returns per unit of risk. Lanka Realty Investments is currently generating about -0.14 per unit of risk. If you would invest 8,760 in National Development Bank on August 31, 2024 and sell it today you would lose (430.00) from holding National Development Bank or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Development Bank vs. Lanka Realty Investments
Performance |
| Timeline |
| National Development Bank |
| Lanka Realty Investments |
National Development and Lanka Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Development and Lanka Realty
The main advantage of trading using opposite National Development and Lanka Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Development position performs unexpectedly, Lanka Realty 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 Realty will offset losses from the drop in Lanka Realty's long position.| National Development vs. HNB Finance | National Development vs. Prime Lands Residencies | National Development vs. Jat Holdings PLC | National Development vs. E M L |
| Lanka Realty vs. HNB Finance | Lanka Realty vs. Prime Lands Residencies | Lanka Realty vs. Jat Holdings PLC | Lanka Realty vs. E M L |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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