Correlation Between Hatton National and Galadari Hotels
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By analyzing existing cross correlation between Hatton National Bank and Galadari Hotels Lanka, you can compare the effects of market volatilities on Hatton National and Galadari 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 Hatton National with a short position of Galadari Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hatton National and Galadari Hotels.
Diversification Opportunities for Hatton National and Galadari Hotels
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hatton and Galadari is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hatton National Bank and Galadari Hotels Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galadari Hotels 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 Galadari Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galadari Hotels Lanka has no effect on the direction of Hatton National i.e., Hatton National and Galadari Hotels go up and down completely randomly.
Pair Corralation between Hatton National and Galadari Hotels
Assuming the 90 days trading horizon Hatton National Bank is expected to generate 0.57 times more return on investment than Galadari Hotels. However, Hatton National Bank is 1.74 times less risky than Galadari Hotels. It trades about -0.26 of its potential returns per unit of risk. Galadari Hotels Lanka is currently generating about -0.2 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 | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hatton National Bank vs. Galadari Hotels Lanka
Performance |
| Timeline |
| Hatton National Bank |
| Galadari Hotels Lanka |
Hatton National and Galadari Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hatton National and Galadari Hotels
The main advantage of trading using opposite Hatton National and Galadari Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hatton National position performs unexpectedly, Galadari 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 Galadari Hotels will offset losses from the drop in Galadari Hotels' 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 |
| Galadari Hotels vs. Citrus Leisure PLC | Galadari Hotels vs. Serendib Hotels PLC | Galadari Hotels vs. Janashakthi Insurance | Galadari Hotels vs. Lighthouse Hotel 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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