Correlation Between Chalet Hotels and Oriental Hotels
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By analyzing existing cross correlation between Chalet Hotels Limited and Oriental Hotels Limited, you can compare the effects of market volatilities on Chalet Hotels 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 Chalet Hotels with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalet Hotels and Oriental Hotels.
Diversification Opportunities for Chalet Hotels and Oriental Hotels
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chalet and Oriental is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chalet Hotels 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 Chalet 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 Chalet Hotels 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 Chalet Hotels i.e., Chalet Hotels and Oriental Hotels go up and down completely randomly.
Pair Corralation between Chalet Hotels and Oriental Hotels
Assuming the 90 days trading horizon Chalet Hotels is expected to generate 14.01 times less return on investment than Oriental Hotels. But when comparing it to its historical volatility, Chalet Hotels Limited is 1.71 times less risky than Oriental Hotels. It trades about 0.03 of its potential returns per unit of risk. Oriental Hotels Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 16,331 in Oriental Hotels Limited on August 25, 2024 and sell it today you would earn a total of 2,449 from holding Oriental Hotels Limited or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chalet Hotels Limited vs. Oriental Hotels Limited
Performance |
| Timeline |
| Chalet Hotels Limited |
| Oriental Hotels |
Chalet Hotels and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chalet Hotels and Oriental Hotels
The main advantage of trading using opposite Chalet Hotels and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chalet Hotels 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.| Chalet Hotels vs. Reliance Industries Limited | Chalet Hotels vs. Indian Oil | Chalet Hotels vs. HDFC Bank Limited | Chalet Hotels vs. Divis Laboratories Limited |
| Oriental Hotels vs. Reliance Industries Limited | Oriental Hotels vs. Indian Oil | Oriental Hotels vs. HDFC Bank Limited | Oriental Hotels vs. Divis Laboratories 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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