Correlation Between HNB Finance and ACL Plastics
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By analyzing existing cross correlation between HNB Finance and ACL Plastics PLC, you can compare the effects of market volatilities on HNB Finance and ACL Plastics 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 ACL Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and ACL Plastics.
Diversification Opportunities for HNB Finance and ACL Plastics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HNB and ACL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and ACL Plastics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACL Plastics 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 ACL Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACL Plastics PLC has no effect on the direction of HNB Finance i.e., HNB Finance and ACL Plastics go up and down completely randomly.
Pair Corralation between HNB Finance and ACL Plastics
Assuming the 90 days trading horizon HNB Finance is expected to generate 50.93 times less return on investment than ACL Plastics. In addition to that, HNB Finance is 1.83 times more volatile than ACL Plastics PLC. It trades about 0.0 of its total potential returns per unit of risk. ACL Plastics PLC is currently generating about 0.1 per unit of volatility. If you would invest 41,275 in ACL Plastics PLC on September 2, 2024 and sell it today you would earn a total of 6,875 from holding ACL Plastics PLC or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.87% |
| Values | Daily Returns |
HNB Finance vs. ACL Plastics PLC
Performance |
| Timeline |
| HNB Finance |
| ACL Plastics PLC |
HNB Finance and ACL Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and ACL Plastics
The main advantage of trading using opposite HNB Finance and ACL Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, ACL Plastics 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 ACL Plastics will offset losses from the drop in ACL Plastics' long position.| HNB Finance vs. Prime Lands Residencies | HNB Finance vs. Lanka Credit and | HNB Finance vs. VIDULLANKA PLC | HNB Finance vs. EX PACK RUGATED CARTONS |
| ACL Plastics vs. Lanka Realty Investments | ACL Plastics vs. Aitken Spence Hotel | ACL Plastics vs. Convenience Foods PLC | ACL Plastics vs. BROWNS INVESTMENTS 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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