Correlation Between Merchant Bank and HATTON NATIONAL
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By analyzing existing cross correlation between Merchant Bank of and HATTON NATIONAL BANK, you can compare the effects of market volatilities on Merchant Bank and HATTON NATIONAL 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 Merchant Bank with a short position of HATTON NATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchant Bank and HATTON NATIONAL.
Diversification Opportunities for Merchant Bank and HATTON NATIONAL
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merchant and HATTON is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Merchant Bank of and HATTON NATIONAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HATTON NATIONAL BANK and Merchant Bank 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 Merchant Bank of are associated (or correlated) with HATTON NATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HATTON NATIONAL BANK has no effect on the direction of Merchant Bank i.e., Merchant Bank and HATTON NATIONAL go up and down completely randomly.
Pair Corralation between Merchant Bank and HATTON NATIONAL
Assuming the 90 days trading horizon Merchant Bank of is expected to under-perform the HATTON NATIONAL. In addition to that, Merchant Bank is 1.7 times more volatile than HATTON NATIONAL BANK. It trades about -0.16 of its total potential returns per unit of risk. HATTON NATIONAL BANK is currently generating about 0.11 per unit of volatility. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merchant Bank of vs. HATTON NATIONAL BANK
Performance |
| Timeline |
| Merchant Bank |
| HATTON NATIONAL BANK |
Merchant Bank and HATTON NATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchant Bank and HATTON NATIONAL
The main advantage of trading using opposite Merchant Bank and HATTON NATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchant Bank position performs unexpectedly, HATTON NATIONAL 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 HATTON NATIONAL will offset losses from the drop in HATTON NATIONAL's long position.| Merchant Bank vs. Hotel Sigiriya PLC | Merchant Bank vs. SERENDIB HOTELS PLC | Merchant Bank vs. Singhe Hospitals | Merchant Bank vs. Pegasus Hotels of |
| HATTON NATIONAL vs. Union Chemicals Lanka | HATTON NATIONAL vs. Tal Lanka Hotels | HATTON NATIONAL vs. Ceylinco Insurance PLC | HATTON NATIONAL vs. Peoples Insurance 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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