Correlation Between ACL Plastics and HNB Finance
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By analyzing existing cross correlation between ACL Plastics PLC and HNB Finance, you can compare the effects of market volatilities on ACL Plastics and HNB Finance 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 ACL Plastics with a short position of HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACL Plastics and HNB Finance.
Diversification Opportunities for ACL Plastics and HNB Finance
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ACL and HNB is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ACL Plastics PLC and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance and ACL Plastics 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 ACL Plastics PLC are associated (or correlated) with HNB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNB Finance has no effect on the direction of ACL Plastics i.e., ACL Plastics and HNB Finance go up and down completely randomly.
Pair Corralation between ACL Plastics and HNB Finance
Assuming the 90 days trading horizon ACL Plastics PLC is expected to generate 0.69 times more return on investment than HNB Finance. However, ACL Plastics PLC is 1.46 times less risky than HNB Finance. It trades about 0.08 of its potential returns per unit of risk. HNB Finance is currently generating about 0.04 per unit of risk. If you would invest 36,025 in ACL Plastics PLC on September 2, 2024 and sell it today you would earn a total of 12,125 from holding ACL Plastics PLC or generate 33.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.26% |
| Values | Daily Returns |
ACL Plastics PLC vs. HNB Finance
Performance |
| Timeline |
| ACL Plastics PLC |
| HNB Finance |
ACL Plastics and HNB Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACL Plastics and HNB Finance
The main advantage of trading using opposite ACL Plastics and HNB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACL Plastics position performs unexpectedly, HNB Finance 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 HNB Finance will offset losses from the drop in HNB Finance's long position.| ACL Plastics vs. Lanka Realty Investments | ACL Plastics vs. Aitken Spence Hotel | ACL Plastics vs. Convenience Foods PLC | ACL Plastics vs. BROWNS INVESTMENTS PLC |
| HNB Finance vs. Prime Lands Residencies | HNB Finance vs. VIDULLANKA PLC | HNB Finance vs. EX PACK RUGATED CARTONS |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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