Correlation Between Union Chemicals and Sri Lanka
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By analyzing existing cross correlation between Union Chemicals Lanka and Sri Lanka Telecom, you can compare the effects of market volatilities on Union Chemicals and Sri Lanka 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 Sri Lanka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Chemicals and Sri Lanka.
Diversification Opportunities for Union Chemicals and Sri Lanka
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Union and Sri is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Union Chemicals Lanka and Sri Lanka Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Lanka Telecom 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 Sri Lanka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Lanka Telecom has no effect on the direction of Union Chemicals i.e., Union Chemicals and Sri Lanka go up and down completely randomly.
Pair Corralation between Union Chemicals and Sri Lanka
Assuming the 90 days trading horizon Union Chemicals Lanka is expected to generate 0.57 times more return on investment than Sri Lanka. However, Union Chemicals Lanka is 1.76 times less risky than Sri Lanka. It trades about -0.16 of its potential returns per unit of risk. Sri Lanka Telecom is currently generating about -0.16 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 Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Union Chemicals Lanka vs. Sri Lanka Telecom
Performance |
| Timeline |
| Union Chemicals Lanka |
| Sri Lanka Telecom |
Union Chemicals and Sri Lanka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Chemicals and Sri Lanka
The main advantage of trading using opposite Union Chemicals and Sri Lanka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Chemicals position performs unexpectedly, Sri Lanka 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 Sri Lanka will offset losses from the drop in Sri Lanka's long position.| Union Chemicals vs. EX PACK RUGATED CARTONS | Union Chemicals vs. PANASIAN POWER PLC | Union Chemicals vs. Distilleries Company of | Union Chemicals vs. Palm Garden Hotels |
| Sri Lanka vs. EX PACK RUGATED CARTONS | Sri Lanka vs. PANASIAN POWER PLC | Sri Lanka vs. Distilleries Company of | Sri Lanka vs. Palm Garden 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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