Correlation Between National Development and COMMERCIAL BANK
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By analyzing existing cross correlation between National Development Bank and COMMERCIAL BANK OF, you can compare the effects of market volatilities on National Development and COMMERCIAL BANK 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 National Development with a short position of COMMERCIAL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Development and COMMERCIAL BANK.
Diversification Opportunities for National Development and COMMERCIAL BANK
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between National and COMMERCIAL is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding National Development Bank and COMMERCIAL BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL BANK and National Development 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 National Development Bank are associated (or correlated) with COMMERCIAL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL BANK has no effect on the direction of National Development i.e., National Development and COMMERCIAL BANK go up and down completely randomly.
Pair Corralation between National Development and COMMERCIAL BANK
Assuming the 90 days trading horizon National Development is expected to generate 2.27 times less return on investment than COMMERCIAL BANK. But when comparing it to its historical volatility, National Development Bank is 1.0 times less risky than COMMERCIAL BANK. It trades about 0.05 of its potential returns per unit of risk. COMMERCIAL BANK OF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,550 in COMMERCIAL BANK OF on September 15, 2024 and sell it today you would earn a total of 1,625 from holding COMMERCIAL BANK OF or generate 19.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
National Development Bank vs. COMMERCIAL BANK OF
Performance |
Timeline |
National Development Bank |
COMMERCIAL BANK |
National Development and COMMERCIAL BANK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Development and COMMERCIAL BANK
The main advantage of trading using opposite National Development and COMMERCIAL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Development position performs unexpectedly, COMMERCIAL BANK 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 COMMERCIAL BANK will offset losses from the drop in COMMERCIAL BANK's long position.National Development vs. Galadari Hotels Lanka | National Development vs. Palm Garden Hotels | National Development vs. Ceylon Tobacco | National Development vs. Singhe Hospitals |
COMMERCIAL BANK vs. Mahaweli Reach Hotel | COMMERCIAL BANK vs. Union Chemicals Lanka | COMMERCIAL BANK vs. Janashakthi Insurance | COMMERCIAL BANK vs. Tangerine Beach Hotels |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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