Correlation Between Mahaweli Reach and HNB Finance
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By analyzing existing cross correlation between Mahaweli Reach Hotel and HNB Finance, you can compare the effects of market volatilities on Mahaweli Reach 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 Reach with a short position of HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahaweli Reach and HNB Finance.
Diversification Opportunities for Mahaweli Reach and HNB Finance
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mahaweli and HNB is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mahaweli Reach Hotel and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance and Mahaweli Reach 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 Reach Hotel 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 Reach i.e., Mahaweli Reach and HNB Finance go up and down completely randomly.
Pair Corralation between Mahaweli Reach and HNB Finance
Assuming the 90 days trading horizon Mahaweli Reach Hotel is expected to generate 1.09 times more return on investment than HNB Finance. However, Mahaweli Reach is 1.09 times more volatile than HNB Finance. It trades about 0.08 of its potential returns per unit of risk. HNB Finance is currently generating about 0.03 per unit of risk. If you would invest 1,220 in Mahaweli Reach Hotel on September 3, 2024 and sell it today you would earn a total of 520.00 from holding Mahaweli Reach Hotel or generate 42.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.17% |
| Values | Daily Returns |
Mahaweli Reach Hotel vs. HNB Finance
Performance |
| Timeline |
| Mahaweli Reach Hotel |
| HNB Finance |
Mahaweli Reach and HNB Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahaweli Reach and HNB Finance
The main advantage of trading using opposite Mahaweli Reach and HNB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahaweli Reach 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 Reach vs. Ceylon Cold Stores | Mahaweli Reach vs. CEYLON HOSPITALS PLC | Mahaweli Reach vs. Union Chemicals Lanka | Mahaweli Reach vs. Ceylon Tobacco |
| HNB Finance vs. Sri Lanka Telecom | HNB Finance vs. Palm Garden Hotels | HNB Finance vs. Renuka Agri Foods | HNB Finance vs. Convenience Foods 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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