Correlation Between Nations Trust and Pan Asia
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By analyzing existing cross correlation between Nations Trust Bank and Pan Asia Banking, you can compare the effects of market volatilities on Nations Trust and Pan Asia 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 Pan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nations Trust and Pan Asia.
Diversification Opportunities for Nations Trust and Pan Asia
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nations and Pan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nations Trust Bank and Pan Asia Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Asia Banking 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 Pan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Asia Banking has no effect on the direction of Nations Trust i.e., Nations Trust and Pan Asia go up and down completely randomly.
Pair Corralation between Nations Trust and Pan Asia
Assuming the 90 days trading horizon Nations Trust is expected to generate 1.06 times less return on investment than Pan Asia. But when comparing it to its historical volatility, Nations Trust Bank is 1.24 times less risky than Pan Asia. It trades about 0.15 of its potential returns per unit of risk. Pan Asia Banking is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,060 in Pan Asia Banking on September 19, 2024 and sell it today you would earn a total of 1,970 from holding Pan Asia Banking or generate 185.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nations Trust Bank vs. Pan Asia Banking
Performance |
| Timeline |
| Nations Trust Bank |
| Pan Asia Banking |
Nations Trust and Pan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nations Trust and Pan Asia
The main advantage of trading using opposite Nations Trust and Pan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nations Trust position performs unexpectedly, Pan Asia 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 Pan Asia will offset losses from the drop in Pan Asia's long position.| Nations Trust vs. Sanasa Development Bank | Nations Trust vs. Pan Asia Banking | Nations Trust vs. Ceylinco Insurance PLC | Nations Trust vs. DFCC Bank PLC |
| Pan Asia vs. Hotel Sigiriya PLC | Pan Asia vs. Softlogic Life Insurance | Pan Asia vs. John Keells Hotels | Pan Asia vs. SERENDIB HOTELS 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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