Correlation Between HNB Finance and John Keells
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By analyzing existing cross correlation between HNB Finance and John Keells Hotels, you can compare the effects of market volatilities on HNB Finance and John Keells 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 John Keells. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and John Keells.
Diversification Opportunities for HNB Finance and John Keells
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HNB and John is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and John Keells Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Keells Hotels 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 John Keells. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Keells Hotels has no effect on the direction of HNB Finance i.e., HNB Finance and John Keells go up and down completely randomly.
Pair Corralation between HNB Finance and John Keells
Assuming the 90 days trading horizon HNB Finance is expected to generate 6.28 times less return on investment than John Keells. In addition to that, HNB Finance is 1.72 times more volatile than John Keells Hotels. It trades about 0.01 of its total potential returns per unit of risk. John Keells Hotels is currently generating about 0.13 per unit of volatility. If you would invest 1,720 in John Keells Hotels on September 3, 2024 and sell it today you would earn a total of 130.00 from holding John Keells Hotels or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNB Finance vs. John Keells Hotels
Performance |
| Timeline |
| HNB Finance |
| John Keells Hotels |
HNB Finance and John Keells Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and John Keells
The main advantage of trading using opposite HNB Finance and John Keells positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, John Keells 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 John Keells will offset losses from the drop in John Keells' long position.| HNB Finance vs. Sri Lanka Telecom | HNB Finance vs. Palm Garden Hotels | HNB Finance vs. Renuka Agri Foods | HNB Finance vs. Convenience Foods PLC |
| John Keells vs. Lanka Credit and | John Keells vs. VIDULLANKA PLC | John Keells vs. Carson Cumberbatch PLC | John Keells vs. Peoples Insurance 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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