Correlation Between HVA Foods and DFCC Bank
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By analyzing existing cross correlation between HVA Foods PLC and DFCC Bank PLC, you can compare the effects of market volatilities on HVA Foods and DFCC 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 HVA Foods with a short position of DFCC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HVA Foods and DFCC Bank.
Diversification Opportunities for HVA Foods and DFCC Bank
Very weak diversification
The 3 months correlation between HVA and DFCC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding HVA Foods PLC and DFCC Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFCC Bank PLC and HVA Foods 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 HVA Foods PLC are associated (or correlated) with DFCC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFCC Bank PLC has no effect on the direction of HVA Foods i.e., HVA Foods and DFCC Bank go up and down completely randomly.
Pair Corralation between HVA Foods and DFCC Bank
Assuming the 90 days trading horizon HVA Foods PLC is expected to generate 2.75 times more return on investment than DFCC Bank. However, HVA Foods is 2.75 times more volatile than DFCC Bank PLC. It trades about 0.16 of its potential returns per unit of risk. DFCC Bank PLC is currently generating about 0.3 per unit of risk. If you would invest 310.00 in HVA Foods PLC on September 12, 2024 and sell it today you would earn a total of 140.00 from holding HVA Foods PLC or generate 45.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HVA Foods PLC vs. DFCC Bank PLC
Performance |
| Timeline |
| HVA Foods PLC |
| DFCC Bank PLC |
HVA Foods and DFCC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HVA Foods and DFCC Bank
The main advantage of trading using opposite HVA Foods and DFCC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HVA Foods position performs unexpectedly, DFCC 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 DFCC Bank will offset losses from the drop in DFCC Bank's long position.| HVA Foods vs. COMMERCIAL BANK OF | HVA Foods vs. Ceylon Cold Stores | HVA Foods vs. Ceylon Tobacco | HVA Foods vs. HDFC Bank of |
| DFCC Bank vs. Ceylinco Insurance PLC | DFCC Bank vs. RENUKA FOODS PLC | DFCC Bank vs. Renuka Agri Foods | DFCC Bank vs. Lanka Milk Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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