Correlation Between Bigbloc Construction and Oriental Hotels
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By analyzing existing cross correlation between Bigbloc Construction Limited and Oriental Hotels Limited, you can compare the effects of market volatilities on Bigbloc Construction 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 Bigbloc Construction with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bigbloc Construction and Oriental Hotels.
Diversification Opportunities for Bigbloc Construction and Oriental Hotels
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bigbloc and Oriental is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bigbloc Construction 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 Bigbloc Construction 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 Bigbloc Construction 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 Bigbloc Construction i.e., Bigbloc Construction and Oriental Hotels go up and down completely randomly.
Pair Corralation between Bigbloc Construction and Oriental Hotels
Assuming the 90 days trading horizon Bigbloc Construction Limited is expected to under-perform the Oriental Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Bigbloc Construction Limited is 1.1 times less risky than Oriental Hotels. The stock trades about -0.34 of its potential returns per unit of risk. The Oriental Hotels Limited is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 17,487 in Oriental Hotels Limited on October 30, 2024 and sell it today you would lose (1,657) from holding Oriental Hotels Limited or give up 9.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bigbloc Construction Limited vs. Oriental Hotels Limited
Performance |
| Timeline |
| Bigbloc Construction |
| Oriental Hotels |
Bigbloc Construction and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bigbloc Construction and Oriental Hotels
The main advantage of trading using opposite Bigbloc Construction and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bigbloc Construction 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.The idea behind Bigbloc Construction Limited and Oriental Hotels Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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