Correlation Between HATTON NATIONAL and Tal Lanka
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By analyzing existing cross correlation between HATTON NATIONAL BANK and Tal Lanka Hotels, you can compare the effects of market volatilities on HATTON NATIONAL and Tal Lanka 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 Tal Lanka. Check out your portfolio center. Please also check ongoing floating volatility patterns of HATTON NATIONAL and Tal Lanka.
Diversification Opportunities for HATTON NATIONAL and Tal Lanka
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HATTON and Tal is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding HATTON NATIONAL BANK and Tal Lanka Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tal Lanka Hotels 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 Tal Lanka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tal Lanka Hotels has no effect on the direction of HATTON NATIONAL i.e., HATTON NATIONAL and Tal Lanka go up and down completely randomly.
Pair Corralation between HATTON NATIONAL and Tal Lanka
Assuming the 90 days trading horizon HATTON NATIONAL is expected to generate 2.19 times less return on investment than Tal Lanka. But when comparing it to its historical volatility, HATTON NATIONAL BANK is 1.24 times less risky than Tal Lanka. It trades about 0.11 of its potential returns per unit of risk. Tal Lanka Hotels is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,850 in Tal Lanka Hotels on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Tal Lanka Hotels or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HATTON NATIONAL BANK vs. Tal Lanka Hotels
Performance |
| Timeline |
| HATTON NATIONAL BANK |
| Tal Lanka Hotels |
HATTON NATIONAL and Tal Lanka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HATTON NATIONAL and Tal Lanka
The main advantage of trading using opposite HATTON NATIONAL and Tal Lanka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HATTON NATIONAL position performs unexpectedly, Tal Lanka 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 Tal Lanka will offset losses from the drop in Tal Lanka'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 |
| Tal Lanka vs. BROWNS INVESTMENTS PLC | Tal Lanka vs. Tangerine Beach Hotels | Tal Lanka vs. Ceylon Guardian Investment | Tal Lanka vs. Lanka Realty Investments |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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