Correlation Between HNB Finance and SERENDIB HOTELS
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By analyzing existing cross correlation between HNB Finance and SERENDIB HOTELS PLC, you can compare the effects of market volatilities on HNB Finance and SERENDIB HOTELS 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 SERENDIB HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNB Finance and SERENDIB HOTELS.
Diversification Opportunities for HNB Finance and SERENDIB HOTELS
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HNB and SERENDIB is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding HNB Finance and SERENDIB HOTELS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERENDIB HOTELS 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 SERENDIB HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERENDIB HOTELS PLC has no effect on the direction of HNB Finance i.e., HNB Finance and SERENDIB HOTELS go up and down completely randomly.
Pair Corralation between HNB Finance and SERENDIB HOTELS
Assuming the 90 days trading horizon HNB Finance is expected to generate 4.35 times less return on investment than SERENDIB HOTELS. But when comparing it to its historical volatility, HNB Finance is 1.1 times less risky than SERENDIB HOTELS. It trades about 0.02 of its potential returns per unit of risk. SERENDIB HOTELS PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 450.00 in SERENDIB HOTELS PLC on September 2, 2024 and sell it today you would earn a total of 800.00 from holding SERENDIB HOTELS PLC or generate 177.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.49% |
| Values | Daily Returns |
HNB Finance vs. SERENDIB HOTELS PLC
Performance |
| Timeline |
| HNB Finance |
| SERENDIB HOTELS PLC |
HNB Finance and SERENDIB HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNB Finance and SERENDIB HOTELS
The main advantage of trading using opposite HNB Finance and SERENDIB HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNB Finance position performs unexpectedly, SERENDIB HOTELS 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 SERENDIB HOTELS will offset losses from the drop in SERENDIB HOTELS's long position.| HNB Finance vs. Prime Lands Residencies | HNB Finance vs. VIDULLANKA PLC | HNB Finance vs. EX PACK RUGATED CARTONS |
| SERENDIB HOTELS vs. Prime Lands Residencies | SERENDIB HOTELS vs. VIDULLANKA PLC | SERENDIB HOTELS vs. EX PACK RUGATED CARTONS |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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