Correlation Between Palm Garden and National Development
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By analyzing existing cross correlation between Palm Garden Hotels and National Development Bank, you can compare the effects of market volatilities on Palm Garden and National Development 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 Palm Garden with a short position of National Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palm Garden and National Development.
Diversification Opportunities for Palm Garden and National Development
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Palm and National is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Palm Garden Hotels and National Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Development Bank and Palm Garden 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 Palm Garden Hotels are associated (or correlated) with National Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Development Bank has no effect on the direction of Palm Garden i.e., Palm Garden and National Development go up and down completely randomly.
Pair Corralation between Palm Garden and National Development
Assuming the 90 days trading horizon Palm Garden Hotels is expected to under-perform the National Development. In addition to that, Palm Garden is 1.31 times more volatile than National Development Bank. It trades about -0.3 of its total potential returns per unit of risk. National Development Bank is currently generating about -0.21 per unit of volatility. If you would invest 12,750 in National Development Bank on November 28, 2024 and sell it today you would lose (1,075) from holding National Development Bank or give up 8.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Palm Garden Hotels vs. National Development Bank
Performance |
| Timeline |
| Palm Garden Hotels |
| National Development Bank |
Palm Garden and National Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palm Garden and National Development
The main advantage of trading using opposite Palm Garden and National Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palm Garden position performs unexpectedly, National Development 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 National Development will offset losses from the drop in National Development's long position.| Palm Garden vs. Dolphin Hotels PLC | Palm Garden vs. Lanka Realty Investments | Palm Garden vs. SERENDIB HOTELS PLC | Palm Garden vs. PEOPLES LEASING FINANCE |
| National Development vs. Ceylon Hospitals PLC | National Development vs. Ceylinco Insurance PLC | National Development vs. Sampath Bank PLC | National Development vs. Janashakthi Insurance |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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