Correlation Between Sri Lanka and Jat Holdings
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By analyzing existing cross correlation between Sri Lanka Telecom and Jat Holdings PLC, you can compare the effects of market volatilities on Sri Lanka and Jat Holdings 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 Jat Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Lanka and Jat Holdings.
Diversification Opportunities for Sri Lanka and Jat Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sri and Jat is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sri Lanka Telecom and Jat Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jat Holdings PLC 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 Jat Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jat Holdings PLC has no effect on the direction of Sri Lanka i.e., Sri Lanka and Jat Holdings go up and down completely randomly.
Pair Corralation between Sri Lanka and Jat Holdings
Assuming the 90 days trading horizon Sri Lanka is expected to generate 7.14 times less return on investment than Jat Holdings. But when comparing it to its historical volatility, Sri Lanka Telecom is 1.78 times less risky than Jat Holdings. It trades about 0.07 of its potential returns per unit of risk. Jat Holdings PLC is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,980 in Jat Holdings PLC on September 13, 2024 and sell it today you would earn a total of 260.00 from holding Jat Holdings PLC or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sri Lanka Telecom vs. Jat Holdings PLC
Performance |
| Timeline |
| Sri Lanka Telecom |
| Jat Holdings PLC |
Sri Lanka and Jat Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Lanka and Jat Holdings
The main advantage of trading using opposite Sri Lanka and Jat Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Lanka position performs unexpectedly, Jat Holdings 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 Jat Holdings will offset losses from the drop in Jat Holdings' long position.| Sri Lanka vs. Jat Holdings PLC | Sri Lanka vs. Lanka Credit and | Sri Lanka vs. VIDULLANKA PLC | Sri Lanka vs. Carson Cumberbatch PLC |
| Jat Holdings vs. Lanka Realty Investments | Jat Holdings vs. RENUKA FOODS PLC | Jat Holdings vs. Ceylon Hotels | Jat Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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