Correlation Between HNB Finance and Alumex PLC
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By analyzing existing cross correlation between HNB Finance and Alumex PLC, you can compare the effects of market volatilities on HNB Finance and Alumex PLC 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 Alumex PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and Alumex PLC.
Diversification Opportunities for HNB Finance and Alumex PLC
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HNB and Alumex is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and Alumex PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumex PLC 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 Alumex PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumex PLC has no effect on the direction of HNB Finance i.e., HNB Finance and Alumex PLC go up and down completely randomly.
Pair Corralation between HNB Finance and Alumex PLC
Assuming the 90 days trading horizon HNB Finance is expected to under-perform the Alumex PLC. But the stock apears to be less risky and, when comparing its historical volatility, HNB Finance is 1.12 times less risky than Alumex PLC. The stock trades about -0.15 of its potential returns per unit of risk. The Alumex PLC is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,590 in Alumex PLC on November 28, 2024 and sell it today you would lose (40.00) from holding Alumex PLC or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNB Finance vs. Alumex PLC
Performance |
| Timeline |
| HNB Finance |
| Alumex PLC |
HNB Finance and Alumex PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and Alumex PLC
The main advantage of trading using opposite HNB Finance and Alumex PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, Alumex PLC 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 Alumex PLC will offset losses from the drop in Alumex PLC's long position.| HNB Finance vs. Amana Bank | HNB Finance vs. Nations Trust Bank | HNB Finance vs. Hatton National Bank | HNB Finance vs. Tal Lanka Hotels |
| Alumex PLC vs. Union Bank | Alumex PLC vs. National Development Bank | Alumex PLC vs. Hatton National Bank | Alumex PLC vs. COMMERCIAL BANK OF |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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