Correlation Between DFCC Bank and Hatton National
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By analyzing existing cross correlation between DFCC Bank PLC and Hatton National Bank, you can compare the effects of market volatilities on DFCC Bank and Hatton National 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 DFCC Bank with a short position of Hatton National. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFCC Bank and Hatton National.
Diversification Opportunities for DFCC Bank and Hatton National
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DFCC and Hatton is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding DFCC Bank PLC and Hatton National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hatton National Bank and DFCC Bank 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 DFCC Bank PLC are associated (or correlated) with Hatton National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hatton National Bank has no effect on the direction of DFCC Bank i.e., DFCC Bank and Hatton National go up and down completely randomly.
Pair Corralation between DFCC Bank and Hatton National
Assuming the 90 days trading horizon DFCC Bank PLC is expected to generate 1.13 times more return on investment than Hatton National. However, DFCC Bank is 1.13 times more volatile than Hatton National Bank. It trades about 0.22 of its potential returns per unit of risk. Hatton National Bank is currently generating about 0.22 per unit of risk. If you would invest 7,940 in DFCC Bank PLC on August 24, 2024 and sell it today you would earn a total of 580.00 from holding DFCC Bank PLC or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFCC Bank PLC vs. Hatton National Bank
Performance |
| Timeline |
| DFCC Bank PLC |
| Hatton National Bank |
DFCC Bank and Hatton National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFCC Bank and Hatton National
The main advantage of trading using opposite DFCC Bank and Hatton National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFCC Bank position performs unexpectedly, Hatton National 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 Hatton National will offset losses from the drop in Hatton National's long position.| DFCC Bank vs. HNB Finance | DFCC Bank vs. Prime Lands Residencies | DFCC Bank vs. Jat Holdings PLC | DFCC Bank vs. E M L |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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