Correlation Between GACM Technologies and Lemon Tree
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By analyzing existing cross correlation between GACM Technologies Limited and Lemon Tree Hotels, you can compare the effects of market volatilities on GACM Technologies 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 GACM Technologies with a short position of Lemon Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of GACM Technologies and Lemon Tree.
Diversification Opportunities for GACM Technologies and Lemon Tree
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GACM and Lemon is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited 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 GACM Technologies 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 GACM Technologies Limited 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 GACM Technologies i.e., GACM Technologies and Lemon Tree go up and down completely randomly.
Pair Corralation between GACM Technologies and Lemon Tree
Assuming the 90 days trading horizon GACM Technologies Limited is expected to generate 0.61 times more return on investment than Lemon Tree. However, GACM Technologies Limited is 1.64 times less risky than Lemon Tree. It trades about 0.15 of its potential returns per unit of risk. Lemon Tree Hotels is currently generating about -0.07 per unit of risk. If you would invest 96.00 in GACM Technologies Limited on October 23, 2024 and sell it today you would earn a total of 4.00 from holding GACM Technologies Limited or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GACM Technologies Limited vs. Lemon Tree Hotels
Performance |
| Timeline |
| GACM Technologies |
| Lemon Tree Hotels |
GACM Technologies and Lemon Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GACM Technologies and Lemon Tree
The main advantage of trading using opposite GACM Technologies and Lemon Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GACM Technologies 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.| GACM Technologies vs. Tera Software Limited | GACM Technologies vs. Le Travenues Technology | GACM Technologies vs. Univa Foods Limited | GACM Technologies vs. Kingfa Science Technology |
| Lemon Tree vs. Reliance Industries Limited | Lemon Tree vs. Life Insurance | Lemon Tree vs. Indian Oil | Lemon Tree vs. Oil Natural Gas |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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