Correlation Between Serendib Hotels and HNB Finance
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By analyzing existing cross correlation between Serendib Hotels PLC and HNB Finance, you can compare the effects of market volatilities on Serendib Hotels 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 Serendib Hotels with a short position of HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Serendib Hotels and HNB Finance.
Diversification Opportunities for Serendib Hotels and HNB Finance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Serendib and HNB is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Serendib Hotels PLC and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance and Serendib Hotels 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 Serendib Hotels 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 Serendib Hotels i.e., Serendib Hotels and HNB Finance go up and down completely randomly.
Pair Corralation between Serendib Hotels and HNB Finance
Assuming the 90 days trading horizon Serendib Hotels PLC is expected to generate 0.99 times more return on investment than HNB Finance. However, Serendib Hotels PLC is 1.01 times less risky than HNB Finance. It trades about 0.24 of its potential returns per unit of risk. HNB Finance is currently generating about -0.16 per unit of risk. If you would invest 1,570 in Serendib Hotels PLC on August 28, 2024 and sell it today you would earn a total of 150.00 from holding Serendib Hotels PLC or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Serendib Hotels PLC vs. HNB Finance
Performance |
| Timeline |
| Serendib Hotels PLC |
| HNB Finance |
Serendib Hotels and HNB Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Serendib Hotels and HNB Finance
The main advantage of trading using opposite Serendib Hotels and HNB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Serendib Hotels 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.| Serendib Hotels vs. Keells Food Products | Serendib Hotels vs. SERENDIB HOTELS PLC | Serendib Hotels vs. Lanka Milk Foods | Serendib Hotels vs. Mahaweli Reach Hotel |
| HNB Finance vs. Lanka Realty Investments | HNB Finance vs. Aitken Spence Hotel | HNB Finance vs. Serendib Hotels PLC | HNB Finance vs. Convenience 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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