Correlation Between Container and Lemon Tree
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By analyzing existing cross correlation between Container of and Lemon Tree Hotels, you can compare the effects of market volatilities on Container 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 Container with a short position of Lemon Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Container and Lemon Tree.
Diversification Opportunities for Container and Lemon Tree
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Container and Lemon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Container of 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 Container 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 Container of 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 Container i.e., Container and Lemon Tree go up and down completely randomly.
Pair Corralation between Container and Lemon Tree
Assuming the 90 days trading horizon Container of is expected to under-perform the Lemon Tree. But the stock apears to be less risky and, when comparing its historical volatility, Container of is 1.09 times less risky than Lemon Tree. The stock trades about -0.05 of its potential returns per unit of risk. The Lemon Tree Hotels is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 11,775 in Lemon Tree Hotels on September 1, 2024 and sell it today you would earn a total of 1,284 from holding Lemon Tree Hotels or generate 10.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Container of vs. Lemon Tree Hotels
Performance |
| Timeline |
| Container |
| Lemon Tree Hotels |
Container and Lemon Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Container and Lemon Tree
The main advantage of trading using opposite Container and Lemon Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Container 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.| Container vs. Lemon Tree Hotels | Container vs. Tree House Education | Container vs. Total Transport Systems | Container vs. Newgen Software Technologies |
| Lemon Tree vs. Infomedia Press Limited | Lemon Tree vs. Shemaroo Entertainment Limited | Lemon Tree vs. Ravi Kumar Distilleries | Lemon Tree vs. Baazar Style Retail |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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