Correlation Between Asian Hotels and Choice International
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By analyzing existing cross correlation between Asian Hotels Limited and Choice International Limited, you can compare the effects of market volatilities on Asian Hotels and Choice International 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 Asian Hotels with a short position of Choice International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Hotels and Choice International.
Diversification Opportunities for Asian Hotels and Choice International
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asian and Choice is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asian Hotels Limited and Choice International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice International and Asian 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 Asian Hotels Limited are associated (or correlated) with Choice International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice International has no effect on the direction of Asian Hotels i.e., Asian Hotels and Choice International go up and down completely randomly.
Pair Corralation between Asian Hotels and Choice International
Assuming the 90 days trading horizon Asian Hotels is expected to generate 44.2 times less return on investment than Choice International. In addition to that, Asian Hotels is 2.23 times more volatile than Choice International Limited. It trades about 0.0 of its total potential returns per unit of risk. Choice International Limited is currently generating about 0.19 per unit of volatility. If you would invest 52,355 in Choice International Limited on September 13, 2024 and sell it today you would earn a total of 3,405 from holding Choice International Limited or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asian Hotels Limited vs. Choice International Limited
Performance |
| Timeline |
| Asian Hotels Limited |
| Choice International |
Asian Hotels and Choice International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asian Hotels and Choice International
The main advantage of trading using opposite Asian Hotels and Choice International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asian Hotels position performs unexpectedly, Choice International 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 Choice International will offset losses from the drop in Choice International's long position.| Asian Hotels vs. Indian Railway Finance | Asian Hotels vs. Cholamandalam Financial Holdings | Asian Hotels vs. Reliance Industries Limited | Asian Hotels vs. Tata Consultancy Services |
| Choice International vs. Reliance Industries Limited | Choice International vs. HDFC Bank Limited | Choice International vs. Oil Natural Gas | Choice International vs. Kingfa Science Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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