Correlation Between Asian Hotels and HDFC Bank
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By analyzing existing cross correlation between Asian Hotels Limited and HDFC Bank Limited, you can compare the effects of market volatilities on Asian Hotels and HDFC 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 Asian Hotels with a short position of HDFC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Hotels and HDFC Bank.
Diversification Opportunities for Asian Hotels and HDFC Bank
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asian and HDFC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Asian Hotels Limited and HDFC Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HDFC Bank Limited 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 HDFC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HDFC Bank Limited has no effect on the direction of Asian Hotels i.e., Asian Hotels and HDFC Bank go up and down completely randomly.
Pair Corralation between Asian Hotels and HDFC Bank
Assuming the 90 days trading horizon Asian Hotels Limited is expected to generate 2.36 times more return on investment than HDFC Bank. However, Asian Hotels is 2.36 times more volatile than HDFC Bank Limited. It trades about 0.31 of its potential returns per unit of risk. HDFC Bank Limited is currently generating about 0.12 per unit of risk. If you would invest 30,335 in Asian Hotels Limited on November 27, 2024 and sell it today you would earn a total of 5,590 from holding Asian Hotels Limited or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asian Hotels Limited vs. HDFC Bank Limited
Performance |
| Timeline |
| Asian Hotels Limited |
| HDFC Bank Limited |
Asian Hotels and HDFC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asian Hotels and HDFC Bank
The main advantage of trading using opposite Asian Hotels and HDFC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asian Hotels position performs unexpectedly, HDFC 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 HDFC Bank will offset losses from the drop in HDFC Bank's long position.| Asian Hotels vs. The Investment Trust | Asian Hotels vs. Ortel Communications Limited | Asian Hotels vs. Cholamandalam Investment and | Asian Hotels vs. Bombay Burmah Trading |
| HDFC Bank vs. Compucom Software Limited | HDFC Bank vs. Arman Financial Services | HDFC Bank vs. IOL Chemicals and | HDFC Bank vs. Hindcon Chemicals Limited |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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