Correlation Between Union Chemicals and Lanka Realty
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By analyzing existing cross correlation between Union Chemicals Lanka and Lanka Realty Investments, you can compare the effects of market volatilities on Union Chemicals 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 Union Chemicals with a short position of Lanka Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Chemicals and Lanka Realty.
Diversification Opportunities for Union Chemicals and Lanka Realty
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and Lanka is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Union Chemicals Lanka 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 Union Chemicals 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 Union Chemicals Lanka 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 Union Chemicals i.e., Union Chemicals and Lanka Realty go up and down completely randomly.
Pair Corralation between Union Chemicals and Lanka Realty
Assuming the 90 days trading horizon Union Chemicals Lanka is expected to generate 0.22 times more return on investment than Lanka Realty. However, Union Chemicals Lanka is 4.55 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 -0.1 per unit of risk. If you would invest 70,000 in Union Chemicals Lanka on August 30, 2024 and sell it today you would lose (1,000.00) from holding Union Chemicals Lanka or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Union Chemicals Lanka vs. Lanka Realty Investments
Performance |
| Timeline |
| Union Chemicals Lanka |
| Lanka Realty Investments |
Union Chemicals and Lanka Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Chemicals and Lanka Realty
The main advantage of trading using opposite Union Chemicals and Lanka Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Chemicals 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.| Union Chemicals vs. EX PACK RUGATED CARTONS | Union Chemicals vs. Carson Cumberbatch PLC | Union Chemicals vs. PANASIAN POWER PLC | Union Chemicals vs. Distilleries Company of |
| Lanka Realty vs. EX PACK RUGATED CARTONS | Lanka Realty vs. Carson Cumberbatch PLC | Lanka Realty vs. PANASIAN POWER PLC | Lanka Realty vs. Distilleries Company of |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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