Correlation Between HATTON NATIONAL and Central Industries
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By analyzing existing cross correlation between HATTON NATIONAL BANK and Central Industries PLC, you can compare the effects of market volatilities on HATTON NATIONAL and Central Industries 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 Central Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of HATTON NATIONAL and Central Industries.
Diversification Opportunities for HATTON NATIONAL and Central Industries
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HATTON and Central is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding HATTON NATIONAL BANK and Central Industries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industries 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 Central Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industries PLC has no effect on the direction of HATTON NATIONAL i.e., HATTON NATIONAL and Central Industries go up and down completely randomly.
Pair Corralation between HATTON NATIONAL and Central Industries
Assuming the 90 days trading horizon HATTON NATIONAL BANK is expected to generate 0.75 times more return on investment than Central Industries. However, HATTON NATIONAL BANK is 1.33 times less risky than Central Industries. It trades about 0.08 of its potential returns per unit of risk. Central Industries PLC is currently generating about -0.02 per unit of risk. If you would invest 16,075 in HATTON NATIONAL BANK on September 5, 2024 and sell it today you would earn a total of 2,450 from holding HATTON NATIONAL BANK or generate 15.24% 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. Central Industries PLC
Performance |
| Timeline |
| HATTON NATIONAL BANK |
| Central Industries PLC |
HATTON NATIONAL and Central Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HATTON NATIONAL and Central Industries
The main advantage of trading using opposite HATTON NATIONAL and Central Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HATTON NATIONAL position performs unexpectedly, Central Industries 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 Central Industries will offset losses from the drop in Central Industries' long position.| HATTON NATIONAL vs. DFCC Bank PLC | HATTON NATIONAL vs. Peoples Insurance PLC | HATTON NATIONAL vs. CEYLINCO INSURANCE PLC | HATTON NATIONAL vs. SEYLAN BANK PLC |
| Central Industries vs. Convenience Foods PLC | Central Industries vs. Ceylinco Insurance PLC | Central Industries vs. RENUKA FOODS PLC | Central Industries vs. HATTON NATIONAL BANK |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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