Correlation Between Jat Holdings and National Development
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By analyzing existing cross correlation between Jat Holdings PLC and National Development Bank, you can compare the effects of market volatilities on Jat Holdings and National Development 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 Jat Holdings with a short position of National Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jat Holdings and National Development.
Diversification Opportunities for Jat Holdings and National Development
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jat and National is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jat Holdings PLC and National Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Development Bank and Jat Holdings 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 Jat Holdings PLC are associated (or correlated) with National Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Development Bank has no effect on the direction of Jat Holdings i.e., Jat Holdings and National Development go up and down completely randomly.
Pair Corralation between Jat Holdings and National Development
Assuming the 90 days trading horizon Jat Holdings PLC is expected to generate 1.34 times more return on investment than National Development. However, Jat Holdings is 1.34 times more volatile than National Development Bank. It trades about 0.21 of its potential returns per unit of risk. National Development Bank is currently generating about -0.12 per unit of risk. If you would invest 1,800 in Jat Holdings PLC on September 2, 2024 and sell it today you would earn a total of 160.00 from holding Jat Holdings PLC or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jat Holdings PLC vs. National Development Bank
Performance |
| Timeline |
| Jat Holdings PLC |
| National Development Bank |
Jat Holdings and National Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jat Holdings and National Development
The main advantage of trading using opposite Jat Holdings and National Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jat Holdings position performs unexpectedly, National Development 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 National Development will offset losses from the drop in National Development's long position.| Jat Holdings vs. Prime Lands Residencies | Jat Holdings vs. Lanka Credit and | Jat Holdings vs. VIDULLANKA PLC | Jat Holdings vs. EX PACK RUGATED CARTONS |
| National Development vs. Prime Lands Residencies | National Development vs. Lanka Credit and | National Development vs. VIDULLANKA PLC | National Development vs. EX PACK RUGATED CARTONS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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