Correlation Between BF Investment and Oriental Hotels
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By analyzing existing cross correlation between BF Investment Limited and Oriental Hotels Limited, you can compare the effects of market volatilities on BF Investment and Oriental Hotels 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 BF Investment with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and Oriental Hotels.
Diversification Opportunities for BF Investment and Oriental Hotels
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BFINVEST and Oriental is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and Oriental Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Hotels and BF 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 BF Investment Limited are associated (or correlated) with Oriental Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Hotels has no effect on the direction of BF Investment i.e., BF Investment and Oriental Hotels go up and down completely randomly.
Pair Corralation between BF Investment and Oriental Hotels
Assuming the 90 days trading horizon BF Investment Limited is expected to generate 1.14 times more return on investment than Oriental Hotels. However, BF Investment is 1.14 times more volatile than Oriental Hotels Limited. It trades about 0.18 of its potential returns per unit of risk. Oriental Hotels Limited is currently generating about 0.02 per unit of risk. If you would invest 66,805 in BF Investment Limited on August 31, 2024 and sell it today you would earn a total of 6,745 from holding BF Investment Limited or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BF Investment Limited vs. Oriental Hotels Limited
Performance |
| Timeline |
| BF Investment Limited |
| Oriental Hotels |
BF Investment and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Investment and Oriental Hotels
The main advantage of trading using opposite BF Investment and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment position performs unexpectedly, Oriental Hotels 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 Oriental Hotels will offset losses from the drop in Oriental Hotels' long position.| BF Investment vs. Manaksia Steels Limited | BF Investment vs. Steelcast Limited | BF Investment vs. Kohinoor Foods Limited | BF Investment vs. Varun Beverages Limited |
| Oriental Hotels vs. Kingfa Science Technology | Oriental Hotels vs. GTL Limited | Oriental Hotels vs. Indo Amines Limited | Oriental Hotels vs. HDFC Mutual Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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