Correlation Between Nations Trust and Lanka Credit
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By analyzing existing cross correlation between Nations Trust Bank and Lanka Credit and, you can compare the effects of market volatilities on Nations Trust and Lanka Credit 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 Nations Trust with a short position of Lanka Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nations Trust and Lanka Credit.
Diversification Opportunities for Nations Trust and Lanka Credit
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nations and Lanka is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nations Trust Bank and Lanka Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanka Credit and Nations Trust 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 Nations Trust Bank are associated (or correlated) with Lanka Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanka Credit has no effect on the direction of Nations Trust i.e., Nations Trust and Lanka Credit go up and down completely randomly.
Pair Corralation between Nations Trust and Lanka Credit
Assuming the 90 days trading horizon Nations Trust Bank is expected to generate 0.41 times more return on investment than Lanka Credit. However, Nations Trust Bank is 2.41 times less risky than Lanka Credit. It trades about 0.43 of its potential returns per unit of risk. Lanka Credit and is currently generating about 0.12 per unit of risk. If you would invest 10,600 in Nations Trust Bank on September 12, 2024 and sell it today you would earn a total of 5,125 from holding Nations Trust Bank or generate 48.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nations Trust Bank vs. Lanka Credit and
Performance |
| Timeline |
| Nations Trust Bank |
| Lanka Credit |
Nations Trust and Lanka Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nations Trust and Lanka Credit
The main advantage of trading using opposite Nations Trust and Lanka Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nations Trust position performs unexpectedly, Lanka Credit 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 Lanka Credit will offset losses from the drop in Lanka Credit's long position.| Nations Trust vs. Lanka Milk Foods | Nations Trust vs. Seylan Bank PLC | Nations Trust vs. Arpico Insurance | Nations Trust vs. Renuka Agri Foods |
| Lanka Credit vs. SEYLAN BANK PLC | Lanka Credit vs. HDFC Bank of | Lanka Credit vs. Palm Garden Hotels | Lanka Credit vs. Colombo Investment Trust |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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