Correlation Between Bosch and Oriental Hotels
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By analyzing existing cross correlation between Bosch Limited and Oriental Hotels Limited, you can compare the effects of market volatilities on Bosch 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 Bosch with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosch and Oriental Hotels.
Diversification Opportunities for Bosch and Oriental Hotels
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bosch and Oriental is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bosch 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 Bosch 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 Bosch 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 Bosch i.e., Bosch and Oriental Hotels go up and down completely randomly.
Pair Corralation between Bosch and Oriental Hotels
Assuming the 90 days trading horizon Bosch Limited is expected to under-perform the Oriental Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Bosch Limited is 1.57 times less risky than Oriental Hotels. The stock trades about -0.01 of its potential returns per unit of risk. The Oriental Hotels Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 18,199 in Oriental Hotels Limited on September 1, 2024 and sell it today you would earn a total of 56.00 from holding Oriental Hotels Limited or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosch Limited vs. Oriental Hotels Limited
Performance |
| Timeline |
| Bosch Limited |
| Oriental Hotels |
Bosch and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosch and Oriental Hotels
The main advantage of trading using opposite Bosch and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosch 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.| Bosch vs. UltraTech Cement Limited | Bosch vs. Agro Tech Foods | Bosch vs. Tips Music Limited | Bosch vs. Mtar Technologies Limited |
| Oriental Hotels vs. MRF Limited | Oriental Hotels vs. Bosch Limited | Oriental Hotels vs. Bajaj Holdings Investment | Oriental Hotels vs. Vardhman Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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