Correlation Between HATTON NATIONAL and Seylan Bank
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By analyzing existing cross correlation between HATTON NATIONAL BANK and Seylan Bank PLC, you can compare the effects of market volatilities on HATTON NATIONAL and Seylan 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 Seylan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HATTON NATIONAL and Seylan Bank.
Diversification Opportunities for HATTON NATIONAL and Seylan Bank
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HATTON and Seylan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding HATTON NATIONAL BANK and Seylan Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seylan 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 Seylan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seylan Bank PLC has no effect on the direction of HATTON NATIONAL i.e., HATTON NATIONAL and Seylan Bank go up and down completely randomly.
Pair Corralation between HATTON NATIONAL and Seylan Bank
Assuming the 90 days trading horizon HATTON NATIONAL is expected to generate 1.25 times less return on investment than Seylan Bank. But when comparing it to its historical volatility, HATTON NATIONAL BANK is 1.75 times less risky than Seylan Bank. It trades about 0.11 of its potential returns per unit of risk. Seylan Bank PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,190 in Seylan Bank PLC on August 28, 2024 and sell it today you would earn a total of 190.00 from holding Seylan Bank PLC or generate 3.66% 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. Seylan Bank PLC
Performance |
| Timeline |
| HATTON NATIONAL BANK |
| Seylan Bank PLC |
HATTON NATIONAL and Seylan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HATTON NATIONAL and Seylan Bank
The main advantage of trading using opposite HATTON NATIONAL and Seylan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HATTON NATIONAL position performs unexpectedly, Seylan 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 Seylan Bank will offset losses from the drop in Seylan Bank'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 |
| Seylan Bank vs. HATTON NATIONAL BANK | Seylan Bank vs. Nations Trust Bank | Seylan Bank vs. Amana Bank | Seylan Bank vs. Ceylon Tobacco |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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