Correlation Between Sampath Bank and HNB Finance
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By analyzing existing cross correlation between Sampath Bank PLC and HNB Finance, you can compare the effects of market volatilities on Sampath Bank and HNB Finance 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 Sampath Bank with a short position of HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampath Bank and HNB Finance.
Diversification Opportunities for Sampath Bank and HNB Finance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sampath and HNB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sampath Bank PLC and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance and Sampath Bank 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 Sampath Bank PLC are associated (or correlated) with HNB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNB Finance has no effect on the direction of Sampath Bank i.e., Sampath Bank and HNB Finance go up and down completely randomly.
Pair Corralation between Sampath Bank and HNB Finance
Assuming the 90 days trading horizon Sampath Bank PLC is expected to generate 0.8 times more return on investment than HNB Finance. However, Sampath Bank PLC is 1.24 times less risky than HNB Finance. It trades about 0.34 of its potential returns per unit of risk. HNB Finance is currently generating about -0.03 per unit of risk. If you would invest 8,790 in Sampath Bank PLC on September 2, 2024 and sell it today you would earn a total of 990.00 from holding Sampath Bank PLC or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampath Bank PLC vs. HNB Finance
Performance |
| Timeline |
| Sampath Bank PLC |
| HNB Finance |
Sampath Bank and HNB Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampath Bank and HNB Finance
The main advantage of trading using opposite Sampath Bank and HNB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampath Bank position performs unexpectedly, HNB Finance 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 HNB Finance will offset losses from the drop in HNB Finance's long position.| Sampath Bank vs. Prime Lands Residencies | Sampath Bank vs. Lanka Credit and | Sampath Bank vs. VIDULLANKA PLC | Sampath Bank vs. EX PACK RUGATED CARTONS |
| HNB Finance vs. Prime Lands Residencies | HNB Finance vs. Lanka Credit and | HNB Finance vs. VIDULLANKA PLC | HNB Finance vs. EX PACK RUGATED CARTONS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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