Correlation Between Lion Brewery and Dow Jones
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By analyzing existing cross correlation between Lion Brewery Ceylon and Dow Jones Industrial, you can compare the effects of market volatilities on Lion Brewery and Dow Jones 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 Lion Brewery with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Brewery and Dow Jones.
Diversification Opportunities for Lion Brewery and Dow Jones
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Dow is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lion Brewery Ceylon and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Lion Brewery 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 Lion Brewery Ceylon are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Lion Brewery i.e., Lion Brewery and Dow Jones go up and down completely randomly.
Pair Corralation between Lion Brewery and Dow Jones
Assuming the 90 days trading horizon Lion Brewery Ceylon is expected to generate 3.28 times more return on investment than Dow Jones. However, Lion Brewery is 3.28 times more volatile than Dow Jones Industrial. It trades about 0.15 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 100,050 in Lion Brewery Ceylon on September 16, 2024 and sell it today you would earn a total of 21,775 from holding Lion Brewery Ceylon or generate 21.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 90.77% |
Values | Daily Returns |
Lion Brewery Ceylon vs. Dow Jones Industrial
Performance |
Timeline |
Lion Brewery and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Lion Brewery Ceylon
Pair trading matchups for Lion Brewery
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Lion Brewery and Dow Jones
The main advantage of trading using opposite Lion Brewery and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Brewery position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Lion Brewery vs. Pan Asia Banking | Lion Brewery vs. Amana Bank | Lion Brewery vs. Sampath Bank PLC | Lion Brewery vs. Commercial Credit and |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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