Correlation Between PANASIAN POWER and National Development
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By analyzing existing cross correlation between PANASIAN POWER PLC and National Development Bank, you can compare the effects of market volatilities on PANASIAN POWER 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 PANASIAN POWER with a short position of National Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of PANASIAN POWER and National Development.
Diversification Opportunities for PANASIAN POWER and National Development
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PANASIAN and National is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PANASIAN POWER PLC 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 PANASIAN POWER 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 PANASIAN POWER PLC 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 PANASIAN POWER i.e., PANASIAN POWER and National Development go up and down completely randomly.
Pair Corralation between PANASIAN POWER and National Development
Assuming the 90 days trading horizon PANASIAN POWER PLC is expected to under-perform the National Development. In addition to that, PANASIAN POWER is 1.34 times more volatile than National Development Bank. It trades about -0.17 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PANASIAN POWER PLC vs. National Development Bank
Performance |
| Timeline |
| PANASIAN POWER PLC |
| National Development Bank |
PANASIAN POWER and National Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PANASIAN POWER and National Development
The main advantage of trading using opposite PANASIAN POWER and National Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PANASIAN POWER 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.| PANASIAN POWER vs. Lion Brewery Ceylon | PANASIAN POWER vs. Union Chemicals Lanka | PANASIAN POWER vs. Renuka Agri Foods | PANASIAN POWER vs. HVA Foods PLC |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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