Correlation Between Union Chemicals and Lanka Credit
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By analyzing existing cross correlation between Union Chemicals Lanka and Lanka Credit and, you can compare the effects of market volatilities on Union Chemicals and Lanka Credit 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 Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Chemicals and Lanka Credit.
Diversification Opportunities for Union Chemicals and Lanka Credit
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Union and Lanka is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Union Chemicals Lanka and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit 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 Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Credit has no effect on the direction of Union Chemicals i.e., Union Chemicals and Lanka Credit go up and down completely randomly.
Pair Corralation between Union Chemicals and Lanka Credit
Assuming the 90 days trading horizon Union Chemicals Lanka is expected to generate 0.15 times more return on investment than Lanka Credit. However, Union Chemicals Lanka is 6.61 times less risky than Lanka Credit. It trades about 0.0 of its potential returns per unit of risk. Lanka Credit and is currently generating about -0.25 per unit of risk. If you would invest 69,975 in Union Chemicals Lanka on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Union Chemicals Lanka or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Union Chemicals Lanka vs. Lanka Credit and
Performance |
| Timeline |
| Union Chemicals Lanka |
| Lanka Credit |
Union Chemicals and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Chemicals and Lanka Credit
The main advantage of trading using opposite Union Chemicals and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Chemicals position performs unexpectedly, Lanka Credit 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 Credit will offset losses from the drop in Lanka Credit's long position.| Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. Singhe Hospitals | Union Chemicals vs. Lanka Realty Investments | Union Chemicals vs. RENUKA FOODS PLC |
| Lanka Credit vs. Sigiriya Village Hotels | Lanka Credit vs. Union Chemicals Lanka | Lanka Credit vs. Sri Lanka Telecom | Lanka Credit 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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