Correlation Between Lanka Milk and HVA Foods
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By analyzing existing cross correlation between Lanka Milk Foods and HVA Foods PLC, you can compare the effects of market volatilities on Lanka Milk and HVA Foods 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 Lanka Milk with a short position of HVA Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanka Milk and HVA Foods.
Diversification Opportunities for Lanka Milk and HVA Foods
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lanka and HVA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lanka Milk Foods and HVA Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HVA Foods PLC and Lanka Milk 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 Lanka Milk Foods are associated (or correlated) with HVA Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HVA Foods PLC has no effect on the direction of Lanka Milk i.e., Lanka Milk and HVA Foods go up and down completely randomly.
Pair Corralation between Lanka Milk and HVA Foods
Assuming the 90 days trading horizon Lanka Milk Foods is expected to generate 0.55 times more return on investment than HVA Foods. However, Lanka Milk Foods is 1.81 times less risky than HVA Foods. It trades about 0.29 of its potential returns per unit of risk. HVA Foods PLC is currently generating about 0.09 per unit of risk. If you would invest 2,900 in Lanka Milk Foods on September 25, 2024 and sell it today you would earn a total of 1,530 from holding Lanka Milk Foods or generate 52.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lanka Milk Foods vs. HVA Foods PLC
Performance |
Timeline |
Lanka Milk Foods |
HVA Foods PLC |
Lanka Milk and HVA Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lanka Milk and HVA Foods
The main advantage of trading using opposite Lanka Milk and HVA Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanka Milk position performs unexpectedly, HVA Foods 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 HVA Foods will offset losses from the drop in HVA Foods' long position.Lanka Milk vs. Softlogic Life Insurance | Lanka Milk vs. CEYLINCO INSURANCE PLC | Lanka Milk vs. Distilleries Company of | Lanka Milk vs. PEOPLES LEASING FINANCE |
HVA Foods vs. HNB Finance | HVA Foods vs. Prime Lands Residencies | HVA Foods vs. Jat Holdings PLC | HVA Foods vs. Lanka Credit and |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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