Correlation Between Sri Lanka and Browns Beach
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By analyzing existing cross correlation between Sri Lanka Telecom and Browns Beach Hotels, you can compare the effects of market volatilities on Sri Lanka and Browns 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 Sri Lanka with a short position of Browns Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Lanka and Browns Beach.
Diversification Opportunities for Sri Lanka and Browns Beach
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sri and Browns is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sri Lanka Telecom and Browns Beach Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Browns Beach Hotels and Sri Lanka 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 Sri Lanka Telecom are associated (or correlated) with Browns Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Browns Beach Hotels has no effect on the direction of Sri Lanka i.e., Sri Lanka and Browns Beach go up and down completely randomly.
Pair Corralation between Sri Lanka and Browns Beach
Assuming the 90 days trading horizon Sri Lanka Telecom is expected to under-perform the Browns Beach. But the stock apears to be less risky and, when comparing its historical volatility, Sri Lanka Telecom is 3.27 times less risky than Browns Beach. The stock trades about -0.07 of its potential returns per unit of risk. The Browns Beach Hotels is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Browns Beach Hotels on August 31, 2024 and sell it today you would earn a total of 150.00 from holding Browns Beach Hotels or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sri Lanka Telecom vs. Browns Beach Hotels
Performance |
| Timeline |
| Sri Lanka Telecom |
| Browns Beach Hotels |
Sri Lanka and Browns Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Lanka and Browns Beach
The main advantage of trading using opposite Sri Lanka and Browns Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Lanka position performs unexpectedly, Browns 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 Browns Beach will offset losses from the drop in Browns Beach's long position.| Sri Lanka vs. HNB Finance | Sri Lanka vs. Prime Lands Residencies | Sri Lanka vs. Jat Holdings PLC | Sri Lanka vs. E M L |
| Browns Beach vs. Ceylon Tobacco | Browns Beach vs. Nuwara Eliya Hotels | Browns Beach vs. Commercial Credit and | Browns Beach vs. Hatton National Bank |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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