Correlation Between BF Utilities and Lemon Tree
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By analyzing existing cross correlation between BF Utilities Limited and Lemon Tree Hotels, you can compare the effects of market volatilities on BF Utilities and Lemon Tree 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 Utilities with a short position of Lemon Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Utilities and Lemon Tree.
Diversification Opportunities for BF Utilities and Lemon Tree
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between BFUTILITIE and Lemon is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BF Utilities Limited and Lemon Tree Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lemon Tree Hotels and BF Utilities 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 Utilities Limited are associated (or correlated) with Lemon Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lemon Tree Hotels has no effect on the direction of BF Utilities i.e., BF Utilities and Lemon Tree go up and down completely randomly.
Pair Corralation between BF Utilities and Lemon Tree
Assuming the 90 days trading horizon BF Utilities Limited is expected to generate 1.6 times more return on investment than Lemon Tree. However, BF Utilities is 1.6 times more volatile than Lemon Tree Hotels. It trades about 0.1 of its potential returns per unit of risk. Lemon Tree Hotels is currently generating about 0.06 per unit of risk. If you would invest 79,615 in BF Utilities Limited on September 21, 2024 and sell it today you would earn a total of 26,120 from holding BF Utilities Limited or generate 32.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BF Utilities Limited vs. Lemon Tree Hotels
Performance |
| Timeline |
| BF Utilities Limited |
| Lemon Tree Hotels |
BF Utilities and Lemon Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Utilities and Lemon Tree
The main advantage of trading using opposite BF Utilities and Lemon Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Utilities position performs unexpectedly, Lemon Tree 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 Lemon Tree will offset losses from the drop in Lemon Tree's long position.| BF Utilities vs. Vraj Iron and | BF Utilities vs. STEEL EXCHANGE INDIA | BF Utilities vs. Visa Steel Limited | BF Utilities vs. Vibhor Steel Tubes |
| Lemon Tree vs. Parag Milk Foods | Lemon Tree vs. BF Utilities Limited | Lemon Tree vs. LT Foods Limited | Lemon Tree vs. Radaan Mediaworks India |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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