Correlation Between HNB Finance and Jat Holdings
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By analyzing existing cross correlation between HNB Finance and Jat Holdings PLC, you can compare the effects of market volatilities on HNB Finance and Jat Holdings 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 Jat Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and Jat Holdings.
Diversification Opportunities for HNB Finance and Jat Holdings
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HNB and Jat is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and Jat Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jat Holdings 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 Jat Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jat Holdings PLC has no effect on the direction of HNB Finance i.e., HNB Finance and Jat Holdings go up and down completely randomly.
Pair Corralation between HNB Finance and Jat Holdings
Assuming the 90 days trading horizon HNB Finance is expected to under-perform the Jat Holdings. But the stock apears to be less risky and, when comparing its historical volatility, HNB Finance is 1.03 times less risky than Jat Holdings. The stock trades about -0.16 of its potential returns per unit of risk. The Jat Holdings PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,780 in Jat Holdings PLC on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Jat Holdings PLC or generate 6.74% 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. Jat Holdings PLC
Performance |
| Timeline |
| HNB Finance |
| Jat Holdings PLC |
HNB Finance and Jat Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and Jat Holdings
The main advantage of trading using opposite HNB Finance and Jat Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, Jat Holdings 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 Jat Holdings will offset losses from the drop in Jat Holdings' long position.| HNB Finance vs. Lanka Realty Investments | HNB Finance vs. Aitken Spence Hotel | HNB Finance vs. Serendib Hotels PLC | HNB Finance vs. Convenience Foods PLC |
| Jat Holdings vs. Convenience Foods PLC | Jat Holdings vs. Pegasus Hotels of | Jat Holdings vs. Arpico Insurance | Jat Holdings vs. RENUKA FOODS 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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