Correlation Between CEYLINCO INSURANCE and HNB Finance
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By analyzing existing cross correlation between CEYLINCO INSURANCE PLC and HNB Finance, you can compare the effects of market volatilities on CEYLINCO INSURANCE 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 CEYLINCO INSURANCE with a short position of HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEYLINCO INSURANCE and HNB Finance.
Diversification Opportunities for CEYLINCO INSURANCE and HNB Finance
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CEYLINCO and HNB is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CEYLINCO INSURANCE PLC and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance and CEYLINCO INSURANCE 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 CEYLINCO INSURANCE 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 CEYLINCO INSURANCE i.e., CEYLINCO INSURANCE and HNB Finance go up and down completely randomly.
Pair Corralation between CEYLINCO INSURANCE and HNB Finance
Assuming the 90 days trading horizon CEYLINCO INSURANCE PLC is expected to generate 0.59 times more return on investment than HNB Finance. However, CEYLINCO INSURANCE PLC is 1.69 times less risky than HNB Finance. It trades about 0.05 of its potential returns per unit of risk. HNB Finance is currently generating about -0.07 per unit of risk. If you would invest 104,000 in CEYLINCO INSURANCE PLC on August 24, 2024 and sell it today you would earn a total of 1,000.00 from holding CEYLINCO INSURANCE PLC or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.0% |
| Values | Daily Returns |
CEYLINCO INSURANCE PLC vs. HNB Finance
Performance |
| Timeline |
| CEYLINCO INSURANCE PLC |
| HNB Finance |
CEYLINCO INSURANCE and HNB Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEYLINCO INSURANCE and HNB Finance
The main advantage of trading using opposite CEYLINCO INSURANCE and HNB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEYLINCO INSURANCE 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.| CEYLINCO INSURANCE vs. Jat Holdings PLC | CEYLINCO INSURANCE vs. Lanka Credit and | CEYLINCO INSURANCE vs. Carson Cumberbatch PLC | CEYLINCO INSURANCE vs. Mahaweli Reach Hotel |
| HNB Finance vs. Ceylon Guardian Investment | HNB Finance vs. BROWNS INVESTMENTS PLC | HNB Finance vs. Ceylon Hotels | HNB Finance vs. Tal Lanka 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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