Correlation Between Mahaweli Coconut and HNB Finance
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By analyzing existing cross correlation between Mahaweli Coconut Plantations and HNB Finance, you can compare the effects of market volatilities on Mahaweli Coconut and HNB Finance 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 Mahaweli Coconut with a short position of HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahaweli Coconut and HNB Finance.
Diversification Opportunities for Mahaweli Coconut and HNB Finance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mahaweli and HNB is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mahaweli Coconut Plantations and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance and Mahaweli Coconut 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 Mahaweli Coconut Plantations are associated (or correlated) with HNB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNB Finance has no effect on the direction of Mahaweli Coconut i.e., Mahaweli Coconut and HNB Finance go up and down completely randomly.
Pair Corralation between Mahaweli Coconut and HNB Finance
Assuming the 90 days trading horizon Mahaweli Coconut Plantations is expected to under-perform the HNB Finance. But the stock apears to be less risky and, when comparing its historical volatility, Mahaweli Coconut Plantations is 1.16 times less risky than HNB Finance. The stock trades about -0.01 of its potential returns per unit of risk. The HNB Finance is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 490.00 in HNB Finance on September 2, 2024 and sell it today you would earn a total of 60.00 from holding HNB Finance or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.85% |
| Values | Daily Returns |
Mahaweli Coconut Plantations vs. HNB Finance
Performance |
| Timeline |
| Mahaweli Coconut Pla |
| HNB Finance |
Mahaweli Coconut and HNB Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahaweli Coconut and HNB Finance
The main advantage of trading using opposite Mahaweli Coconut and HNB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahaweli Coconut position performs unexpectedly, HNB Finance 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 HNB Finance will offset losses from the drop in HNB Finance's long position.| Mahaweli Coconut vs. Prime Lands Residencies | Mahaweli Coconut vs. VIDULLANKA PLC | Mahaweli Coconut vs. EX PACK RUGATED CARTONS |
| HNB Finance vs. Prime Lands Residencies | HNB Finance vs. VIDULLANKA PLC | HNB Finance 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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