Correlation Between HNB Finance and Lanka Credit
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By analyzing existing cross correlation between HNB Finance and Lanka Credit and, you can compare the effects of market volatilities on HNB Finance and Lanka Credit 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 Lanka Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and Lanka Credit.
Diversification Opportunities for HNB Finance and Lanka Credit
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HNB and Lanka is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit 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 Lanka Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Credit has no effect on the direction of HNB Finance i.e., HNB Finance and Lanka Credit go up and down completely randomly.
Pair Corralation between HNB Finance and Lanka Credit
Assuming the 90 days trading horizon HNB Finance is expected to generate 0.57 times more return on investment than Lanka Credit. However, HNB Finance is 1.77 times less risky than Lanka Credit. It trades about -0.07 of its potential returns per unit of risk. Lanka Credit and is currently generating about -0.04 per unit of risk. If you would invest 590.00 in HNB Finance on August 24, 2024 and sell it today you would lose (20.00) from holding HNB Finance or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNB Finance vs. Lanka Credit and
Performance |
| Timeline |
| HNB Finance |
| Lanka Credit |
HNB Finance and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and Lanka Credit
The main advantage of trading using opposite HNB Finance and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, Lanka Credit 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 Lanka Credit will offset losses from the drop in Lanka Credit's long position.| HNB Finance vs. Ceylon Guardian Investment | HNB Finance vs. BROWNS INVESTMENTS PLC | HNB Finance vs. Ceylon Hotels | HNB Finance vs. Tal Lanka Hotels |
| Lanka Credit vs. Jat Holdings PLC | Lanka Credit vs. Carson Cumberbatch PLC | Lanka Credit vs. Peoples Insurance PLC | Lanka Credit vs. Mahaweli Reach Hotel |
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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