Correlation Between Hatton National and DFCC Bank
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By analyzing existing cross correlation between Hatton National Bank and DFCC Bank PLC, you can compare the effects of market volatilities on Hatton National and DFCC 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 Hatton National with a short position of DFCC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hatton National and DFCC Bank.
Diversification Opportunities for Hatton National and DFCC Bank
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hatton and DFCC is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Hatton National Bank and DFCC Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFCC Bank 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 DFCC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFCC Bank PLC has no effect on the direction of Hatton National i.e., Hatton National and DFCC Bank go up and down completely randomly.
Pair Corralation between Hatton National and DFCC Bank
Assuming the 90 days trading horizon Hatton National Bank is expected to generate 0.84 times more return on investment than DFCC Bank. However, Hatton National Bank is 1.2 times less risky than DFCC Bank. It trades about 0.11 of its potential returns per unit of risk. DFCC Bank PLC is currently generating about 0.09 per unit of risk. If you would invest 9,300 in Hatton National Bank on August 27, 2024 and sell it today you would earn a total of 13,600 from holding Hatton National Bank or generate 146.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hatton National Bank vs. DFCC Bank PLC
Performance |
| Timeline |
| Hatton National Bank |
| DFCC Bank PLC |
Hatton National and DFCC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hatton National and DFCC Bank
The main advantage of trading using opposite Hatton National and DFCC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hatton National position performs unexpectedly, DFCC 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 DFCC Bank will offset losses from the drop in DFCC Bank'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 |
| DFCC Bank vs. CEYLON HOSPITALS PLC | DFCC Bank vs. RENUKA FOODS PLC | DFCC Bank vs. Lanka Milk Foods | DFCC Bank vs. Distilleries Company of |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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