Correlation Between Nations Trust and Union Chemicals
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By analyzing existing cross correlation between Nations Trust Bank and Union Chemicals Lanka, you can compare the effects of market volatilities on Nations Trust and Union Chemicals 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 Union Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nations Trust and Union Chemicals.
Diversification Opportunities for Nations Trust and Union Chemicals
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nations and Union is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nations Trust Bank and Union Chemicals Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Chemicals Lanka 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 Union Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Chemicals Lanka has no effect on the direction of Nations Trust i.e., Nations Trust and Union Chemicals go up and down completely randomly.
Pair Corralation between Nations Trust and Union Chemicals
Assuming the 90 days trading horizon Nations Trust Bank is expected to generate 3.65 times more return on investment than Union Chemicals. However, Nations Trust is 3.65 times more volatile than Union Chemicals Lanka. It trades about 0.23 of its potential returns per unit of risk. Union Chemicals Lanka is currently generating about 0.0 per unit of risk. If you would invest 13,925 in Nations Trust Bank on August 28, 2024 and sell it today you would earn a total of 900.00 from holding Nations Trust Bank or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Nations Trust Bank vs. Union Chemicals Lanka
Performance |
| Timeline |
| Nations Trust Bank |
| Union Chemicals Lanka |
Nations Trust and Union Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nations Trust and Union Chemicals
The main advantage of trading using opposite Nations Trust and Union Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nations Trust position performs unexpectedly, Union Chemicals 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 Union Chemicals will offset losses from the drop in Union Chemicals' long position.| Nations Trust vs. HVA Foods PLC | Nations Trust vs. Commercial Credit and | Nations Trust vs. Hatton National Bank | Nations Trust vs. Convenience Foods PLC |
| Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. Singhe Hospitals | Union Chemicals vs. Lanka Realty Investments | Union Chemicals vs. RENUKA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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