Correlation Between HNB Finance and Dow Jones
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By analyzing existing cross correlation between HNB Finance and Dow Jones Industrial, you can compare the effects of market volatilities on HNB Finance and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and Dow Jones.
Diversification Opportunities for HNB Finance and Dow Jones
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HNB and Dow is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of HNB Finance i.e., HNB Finance and Dow Jones go up and down completely randomly.
Pair Corralation between HNB Finance and Dow Jones
Assuming the 90 days trading horizon HNB Finance is expected to generate 3.93 times more return on investment than Dow Jones. However, HNB Finance is 3.93 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 430.00 in HNB Finance on August 31, 2024 and sell it today you would earn a total of 130.00 from holding HNB Finance or generate 30.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.51% |
| Values | Daily Returns |
HNB Finance vs. Dow Jones Industrial
Performance |
| Timeline |
HNB Finance and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
HNB Finance
Pair trading matchups for HNB Finance
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with HNB Finance and Dow Jones
The main advantage of trading using opposite HNB Finance and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| HNB Finance vs. Palm Garden Hotels | HNB Finance vs. Ceylon Tobacco | HNB Finance vs. Singhe Hospitals | HNB Finance vs. Aitken Spence Hotel |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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