Correlation Between HNB Finance and Aitken Spence
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By analyzing existing cross correlation between HNB Finance and Aitken Spence Hotel, you can compare the effects of market volatilities on HNB Finance and Aitken Spence 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 HNB Finance with a short position of Aitken Spence. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and Aitken Spence.
Diversification Opportunities for HNB Finance and Aitken Spence
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HNB and Aitken is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and Aitken Spence Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aitken Spence Hotel and HNB Finance 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 HNB Finance are associated (or correlated) with Aitken Spence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aitken Spence Hotel has no effect on the direction of HNB Finance i.e., HNB Finance and Aitken Spence go up and down completely randomly.
Pair Corralation between HNB Finance and Aitken Spence
Assuming the 90 days trading horizon HNB Finance is expected to generate 7.16 times less return on investment than Aitken Spence. In addition to that, HNB Finance is 1.78 times more volatile than Aitken Spence Hotel. It trades about 0.01 of its total potential returns per unit of risk. Aitken Spence Hotel is currently generating about 0.16 per unit of volatility. If you would invest 6,160 in Aitken Spence Hotel on September 3, 2024 and sell it today you would earn a total of 540.00 from holding Aitken Spence Hotel or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNB Finance vs. Aitken Spence Hotel
Performance |
| Timeline |
| HNB Finance |
| Aitken Spence Hotel |
HNB Finance and Aitken Spence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and Aitken Spence
The main advantage of trading using opposite HNB Finance and Aitken Spence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, Aitken Spence 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 Aitken Spence will offset losses from the drop in Aitken Spence's long position.| HNB Finance vs. Sri Lanka Telecom | HNB Finance vs. Palm Garden Hotels | HNB Finance vs. Renuka Agri Foods | HNB Finance vs. Convenience Foods PLC |
| Aitken Spence vs. Lanka Credit and | Aitken Spence vs. VIDULLANKA PLC | Aitken Spence vs. Carson Cumberbatch PLC | Aitken Spence vs. Peoples Insurance PLC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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