Correlation Between HVA Foods and Lanka Milk
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By analyzing existing cross correlation between HVA Foods PLC and Lanka Milk Foods, you can compare the effects of market volatilities on HVA Foods and Lanka Milk 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 HVA Foods with a short position of Lanka Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of HVA Foods and Lanka Milk.
Diversification Opportunities for HVA Foods and Lanka Milk
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HVA and Lanka is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding HVA Foods PLC and Lanka Milk Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Milk Foods and HVA Foods 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 HVA Foods PLC are associated (or correlated) with Lanka Milk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Milk Foods has no effect on the direction of HVA Foods i.e., HVA Foods and Lanka Milk go up and down completely randomly.
Pair Corralation between HVA Foods and Lanka Milk
Assuming the 90 days trading horizon HVA Foods is expected to generate 1.43 times less return on investment than Lanka Milk. In addition to that, HVA Foods is 2.05 times more volatile than Lanka Milk Foods. It trades about 0.17 of its total potential returns per unit of risk. Lanka Milk Foods is currently generating about 0.5 per unit of volatility. If you would invest 3,190 in Lanka Milk Foods on September 25, 2024 and sell it today you would earn a total of 1,240 from holding Lanka Milk Foods or generate 38.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
HVA Foods PLC vs. Lanka Milk Foods
Performance |
Timeline |
HVA Foods PLC |
Lanka Milk Foods |
HVA Foods and Lanka Milk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HVA Foods and Lanka Milk
The main advantage of trading using opposite HVA Foods and Lanka Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HVA Foods position performs unexpectedly, Lanka Milk 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 Milk will offset losses from the drop in Lanka Milk's long position.HVA Foods vs. HNB Finance | HVA Foods vs. Prime Lands Residencies | HVA Foods vs. Jat Holdings PLC | HVA Foods vs. Lanka Credit and |
Lanka Milk vs. Softlogic Life Insurance | Lanka Milk vs. CEYLINCO INSURANCE PLC | Lanka Milk vs. Distilleries Company of | Lanka Milk vs. PEOPLES LEASING FINANCE |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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