Correlation Between HNB Finance and Ceylon Tobacco
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By analyzing existing cross correlation between HNB Finance and Ceylon Tobacco, you can compare the effects of market volatilities on HNB Finance and Ceylon Tobacco 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 Ceylon Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and Ceylon Tobacco.
Diversification Opportunities for HNB Finance and Ceylon Tobacco
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HNB and Ceylon is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and Ceylon Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Tobacco 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 Ceylon Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Tobacco has no effect on the direction of HNB Finance i.e., HNB Finance and Ceylon Tobacco go up and down completely randomly.
Pair Corralation between HNB Finance and Ceylon Tobacco
Assuming the 90 days trading horizon HNB Finance is expected to under-perform the Ceylon Tobacco. In addition to that, HNB Finance is 1.06 times more volatile than Ceylon Tobacco. It trades about -0.2 of its total potential returns per unit of risk. Ceylon Tobacco is currently generating about 0.18 per unit of volatility. If you would invest 140,000 in Ceylon Tobacco on November 4, 2024 and sell it today you would earn a total of 7,500 from holding Ceylon Tobacco or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNB Finance vs. Ceylon Tobacco
Performance |
| Timeline |
| HNB Finance |
| Ceylon Tobacco |
HNB Finance and Ceylon Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and Ceylon Tobacco
The main advantage of trading using opposite HNB Finance and Ceylon Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, Ceylon Tobacco 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 Ceylon Tobacco will offset losses from the drop in Ceylon Tobacco's long position.| HNB Finance vs. Prime Lands Residencies | HNB Finance vs. Jat Holdings PLC | HNB Finance vs. E M L | HNB Finance vs. Lanka Credit and |
| Ceylon Tobacco vs. Convenience Foods PLC | Ceylon Tobacco vs. Aitken Spence Hotel | Ceylon Tobacco vs. HVA Foods PLC | Ceylon Tobacco vs. CEYLON HOSPITALS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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