Correlation Between Hatton National and Ceylinco Insurance
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By analyzing existing cross correlation between Hatton National Bank and Ceylinco Insurance PLC, you can compare the effects of market volatilities on Hatton National and Ceylinco Insurance 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 Hatton National with a short position of Ceylinco Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hatton National and Ceylinco Insurance.
Diversification Opportunities for Hatton National and Ceylinco Insurance
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hatton and Ceylinco is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hatton National Bank and Ceylinco Insurance PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylinco Insurance PLC and Hatton National 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 Hatton National Bank are associated (or correlated) with Ceylinco Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylinco Insurance PLC has no effect on the direction of Hatton National i.e., Hatton National and Ceylinco Insurance go up and down completely randomly.
Pair Corralation between Hatton National and Ceylinco Insurance
Assuming the 90 days trading horizon Hatton National is expected to generate 1.9 times less return on investment than Ceylinco Insurance. But when comparing it to its historical volatility, Hatton National Bank is 1.17 times less risky than Ceylinco Insurance. It trades about 0.15 of its potential returns per unit of risk. Ceylinco Insurance PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 236,400 in Ceylinco Insurance PLC on August 28, 2024 and sell it today you would earn a total of 13,600 from holding Ceylinco Insurance PLC or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.42% |
| Values | Daily Returns |
Hatton National Bank vs. Ceylinco Insurance PLC
Performance |
| Timeline |
| Hatton National Bank |
| Ceylinco Insurance PLC |
Hatton National and Ceylinco Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hatton National and Ceylinco Insurance
The main advantage of trading using opposite Hatton National and Ceylinco Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hatton National position performs unexpectedly, Ceylinco Insurance 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 Ceylinco Insurance will offset losses from the drop in Ceylinco Insurance's long position.| Hatton National vs. Trans Asia Hotels | Hatton National vs. Mahaweli Reach Hotel | Hatton National vs. BROWNS INVESTMENTS PLC | Hatton National vs. Softlogic Life Insurance |
| Ceylinco Insurance vs. Tal Lanka Hotels | Ceylinco Insurance vs. Tangerine Beach Hotels | Ceylinco Insurance vs. Ceylon Hospitals PLC | Ceylinco Insurance vs. Dolphin Hotels 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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