Correlation Between Foods Inns and Kamat Hotels
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By analyzing existing cross correlation between Foods Inns Limited and Kamat Hotels Limited, you can compare the effects of market volatilities on Foods Inns and Kamat 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 Foods Inns with a short position of Kamat Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foods Inns and Kamat Hotels.
Diversification Opportunities for Foods Inns and Kamat Hotels
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Foods and Kamat is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Foods Inns Limited and Kamat Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamat Hotels Limited and Foods Inns 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 Foods Inns Limited are associated (or correlated) with Kamat Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamat Hotels Limited has no effect on the direction of Foods Inns i.e., Foods Inns and Kamat Hotels go up and down completely randomly.
Pair Corralation between Foods Inns and Kamat Hotels
Assuming the 90 days trading horizon Foods Inns Limited is expected to under-perform the Kamat Hotels. In addition to that, Foods Inns is 1.06 times more volatile than Kamat Hotels Limited. It trades about -0.03 of its total potential returns per unit of risk. Kamat Hotels Limited is currently generating about -0.01 per unit of volatility. If you would invest 27,615 in Kamat Hotels Limited on September 14, 2024 and sell it today you would lose (3,691) from holding Kamat Hotels Limited or give up 13.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Foods Inns Limited vs. Kamat Hotels Limited
Performance |
| Timeline |
| Foods Inns Limited |
| Kamat Hotels Limited |
Foods Inns and Kamat Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foods Inns and Kamat Hotels
The main advantage of trading using opposite Foods Inns and Kamat Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foods Inns position performs unexpectedly, Kamat 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 Kamat Hotels will offset losses from the drop in Kamat Hotels' long position.| Foods Inns vs. Nestle India Limited | Foods Inns vs. Britannia Industries Limited | Foods Inns vs. TATA SUMER PRODUCTS | Foods Inns vs. Patanjali Foods Limited |
| Kamat Hotels vs. Indian Railway Finance | Kamat Hotels vs. Cholamandalam Financial Holdings | Kamat Hotels vs. Reliance Industries Limited | Kamat Hotels vs. Tata Consultancy Services |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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