Correlation Between HNB Finance and Seylan Bank
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By analyzing existing cross correlation between HNB Finance and Seylan Bank PLC, you can compare the effects of market volatilities on HNB Finance and Seylan Bank 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 Seylan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and Seylan Bank.
Diversification Opportunities for HNB Finance and Seylan Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HNB and Seylan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and Seylan Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seylan Bank 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 Seylan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seylan Bank PLC has no effect on the direction of HNB Finance i.e., HNB Finance and Seylan Bank go up and down completely randomly.
Pair Corralation between HNB Finance and Seylan Bank
Assuming the 90 days trading horizon HNB Finance is expected to generate 2.57 times less return on investment than Seylan Bank. In addition to that, HNB Finance is 1.09 times more volatile than Seylan Bank PLC. It trades about 0.03 of its total potential returns per unit of risk. Seylan Bank PLC is currently generating about 0.1 per unit of volatility. If you would invest 2,960 in Seylan Bank PLC on August 31, 2024 and sell it today you would earn a total of 3,140 from holding Seylan Bank PLC or generate 106.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.75% |
| Values | Daily Returns |
HNB Finance vs. Seylan Bank PLC
Performance |
| Timeline |
| HNB Finance |
| Seylan Bank PLC |
HNB Finance and Seylan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and Seylan Bank
The main advantage of trading using opposite HNB Finance and Seylan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, Seylan Bank 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 Seylan Bank will offset losses from the drop in Seylan Bank's long position.| HNB Finance vs. Palm Garden Hotels | HNB Finance vs. Ceylon Tobacco | HNB Finance vs. Singhe Hospitals | HNB Finance vs. Aitken Spence Hotel |
| Seylan Bank vs. Tal Lanka Hotels | Seylan Bank vs. Serendib Hotels PLC | Seylan Bank vs. Asian Hotels and | Seylan Bank vs. Browns Beach Hotels |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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