Correlation Between Sri Lanka and EX PACK
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By analyzing existing cross correlation between Sri Lanka Telecom and EX PACK RUGATED CARTONS, you can compare the effects of market volatilities on Sri Lanka and EX PACK 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 EX PACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Lanka and EX PACK.
Diversification Opportunities for Sri Lanka and EX PACK
Poor diversification
The 3 months correlation between Sri and PACKN0000 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sri Lanka Telecom and EX PACK RUGATED CARTONS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EX PACK RUGATED 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 EX PACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EX PACK RUGATED has no effect on the direction of Sri Lanka i.e., Sri Lanka and EX PACK go up and down completely randomly.
Pair Corralation between Sri Lanka and EX PACK
Assuming the 90 days trading horizon Sri Lanka Telecom is expected to generate 1.71 times more return on investment than EX PACK. However, Sri Lanka is 1.71 times more volatile than EX PACK RUGATED CARTONS. It trades about 0.15 of its potential returns per unit of risk. EX PACK RUGATED CARTONS is currently generating about 0.2 per unit of risk. If you would invest 5,520 in Sri Lanka Telecom on September 12, 2024 and sell it today you would earn a total of 1,260 from holding Sri Lanka Telecom or generate 22.83% 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. EX PACK RUGATED CARTONS
Performance |
| Timeline |
| Sri Lanka Telecom |
| EX PACK RUGATED |
Sri Lanka and EX PACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Lanka and EX PACK
The main advantage of trading using opposite Sri Lanka and EX PACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Lanka position performs unexpectedly, EX PACK 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 EX PACK will offset losses from the drop in EX PACK's 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 |
| EX PACK vs. Jat Holdings PLC | EX PACK vs. Lanka Credit and | EX PACK vs. VIDULLANKA PLC | EX PACK vs. Carson Cumberbatch 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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