Correlation Between Colombo Investment and Hatton National
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By analyzing existing cross correlation between Colombo Investment Trust and Hatton National Bank, you can compare the effects of market volatilities on Colombo Investment and Hatton National 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 Colombo Investment with a short position of Hatton National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colombo Investment and Hatton National.
Diversification Opportunities for Colombo Investment and Hatton National
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Colombo and Hatton is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Colombo Investment Trust and Hatton National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hatton National Bank and Colombo Investment 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 Colombo Investment Trust are associated (or correlated) with Hatton National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hatton National Bank has no effect on the direction of Colombo Investment i.e., Colombo Investment and Hatton National go up and down completely randomly.
Pair Corralation between Colombo Investment and Hatton National
Assuming the 90 days trading horizon Colombo Investment is expected to generate 1.22 times less return on investment than Hatton National. In addition to that, Colombo Investment is 2.45 times more volatile than Hatton National Bank. It trades about 0.14 of its total potential returns per unit of risk. Hatton National Bank is currently generating about 0.41 per unit of volatility. If you would invest 16,400 in Hatton National Bank on September 15, 2024 and sell it today you would earn a total of 8,500 from holding Hatton National Bank or generate 51.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 56.67% |
Values | Daily Returns |
Colombo Investment Trust vs. Hatton National Bank
Performance |
Timeline |
Colombo Investment Trust |
Hatton National Bank |
Colombo Investment and Hatton National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Colombo Investment and Hatton National
The main advantage of trading using opposite Colombo Investment and Hatton National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colombo Investment position performs unexpectedly, Hatton National 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 Hatton National will offset losses from the drop in Hatton National's long position.Colombo Investment vs. Hatton National Bank | ||
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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