Correlation Between Hatton National and Eden Hotel
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By analyzing existing cross correlation between Hatton National Bank and Eden Hotel Lanka, you can compare the effects of market volatilities on Hatton National and Eden Hotel 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 Eden Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hatton National and Eden Hotel.
Diversification Opportunities for Hatton National and Eden Hotel
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hatton and Eden is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hatton National Bank and Eden Hotel Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eden Hotel Lanka 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 Eden Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eden Hotel Lanka has no effect on the direction of Hatton National i.e., Hatton National and Eden Hotel go up and down completely randomly.
Pair Corralation between Hatton National and Eden Hotel
Assuming the 90 days trading horizon Hatton National Bank is expected to generate 1.0 times more return on investment than Eden Hotel. However, Hatton National Bank is 1.0 times less risky than Eden Hotel. It trades about -0.26 of its potential returns per unit of risk. Eden Hotel Lanka is currently generating about -0.59 per unit of risk. If you would invest 35,025 in Hatton National Bank on November 28, 2024 and sell it today you would lose (2,275) from holding Hatton National Bank or give up 6.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hatton National Bank vs. Eden Hotel Lanka
Performance |
| Timeline |
| Hatton National Bank |
| Eden Hotel Lanka |
Hatton National and Eden Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hatton National and Eden Hotel
The main advantage of trading using opposite Hatton National and Eden Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hatton National position performs unexpectedly, Eden Hotel 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 Eden Hotel will offset losses from the drop in Eden Hotel's long position.| Hatton National vs. SERENDIB HOTELS PLC | Hatton National vs. Singhe Hospitals | Hatton National vs. CEYLINCO INSURANCE PLC | Hatton National vs. Renuka City Hotel |
| Eden Hotel vs. Hotel Sigiriya PLC | Eden Hotel vs. Colombo Investment Trust | Eden Hotel vs. CEYLON HOSPITALS PLC | Eden Hotel vs. Carson Cumberbatch 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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