Correlation Between HATTON NATIONAL and PEOPLES LEASING
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By analyzing existing cross correlation between HATTON NATIONAL BANK and PEOPLES LEASING FINANCE, you can compare the effects of market volatilities on HATTON NATIONAL and PEOPLES LEASING 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 PEOPLES LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of HATTON NATIONAL and PEOPLES LEASING.
Diversification Opportunities for HATTON NATIONAL and PEOPLES LEASING
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HATTON and PEOPLES is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding HATTON NATIONAL BANK and PEOPLES LEASING FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEOPLES LEASING FINANCE 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 PEOPLES LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEOPLES LEASING FINANCE has no effect on the direction of HATTON NATIONAL i.e., HATTON NATIONAL and PEOPLES LEASING go up and down completely randomly.
Pair Corralation between HATTON NATIONAL and PEOPLES LEASING
Assuming the 90 days trading horizon HATTON NATIONAL BANK is expected to generate 1.22 times more return on investment than PEOPLES LEASING. However, HATTON NATIONAL is 1.22 times more volatile than PEOPLES LEASING FINANCE. It trades about 0.11 of its potential returns per unit of risk. PEOPLES LEASING FINANCE is currently generating about 0.13 per unit of risk. If you would invest 18,125 in HATTON NATIONAL BANK on August 28, 2024 and sell it today you would earn a total of 600.00 from holding HATTON NATIONAL BANK or generate 3.31% 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. PEOPLES LEASING FINANCE
Performance |
| Timeline |
| HATTON NATIONAL BANK |
| PEOPLES LEASING FINANCE |
HATTON NATIONAL and PEOPLES LEASING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HATTON NATIONAL and PEOPLES LEASING
The main advantage of trading using opposite HATTON NATIONAL and PEOPLES LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HATTON NATIONAL position performs unexpectedly, PEOPLES LEASING 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 PEOPLES LEASING will offset losses from the drop in PEOPLES LEASING's long position.| HATTON NATIONAL vs. Union Chemicals Lanka | HATTON NATIONAL vs. Tal Lanka Hotels | HATTON NATIONAL vs. Ceylinco Insurance PLC | HATTON NATIONAL vs. Peoples Insurance PLC |
| PEOPLES LEASING vs. Convenience Foods PLC | PEOPLES LEASING vs. Nuwara Eliya Hotels | PEOPLES LEASING vs. HVA Foods PLC | PEOPLES LEASING vs. Serendib 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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