Correlation Between Great Eastern and Royal Orchid
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By analyzing existing cross correlation between The Great Eastern and Royal Orchid Hotels, you can compare the effects of market volatilities on Great Eastern and Royal Orchid 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 Great Eastern with a short position of Royal Orchid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Eastern and Royal Orchid.
Diversification Opportunities for Great Eastern and Royal Orchid
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Royal is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Great Eastern and Royal Orchid Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Orchid Hotels and Great Eastern 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 The Great Eastern are associated (or correlated) with Royal Orchid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Orchid Hotels has no effect on the direction of Great Eastern i.e., Great Eastern and Royal Orchid go up and down completely randomly.
Pair Corralation between Great Eastern and Royal Orchid
Assuming the 90 days trading horizon The Great Eastern is expected to generate 0.79 times more return on investment than Royal Orchid. However, The Great Eastern is 1.27 times less risky than Royal Orchid. It trades about 0.05 of its potential returns per unit of risk. Royal Orchid Hotels is currently generating about 0.03 per unit of risk. If you would invest 66,882 in The Great Eastern on September 4, 2024 and sell it today you would earn a total of 40,783 from holding The Great Eastern or generate 60.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Great Eastern vs. Royal Orchid Hotels
Performance |
| Timeline |
| Great Eastern |
| Royal Orchid Hotels |
Great Eastern and Royal Orchid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Eastern and Royal Orchid
The main advantage of trading using opposite Great Eastern and Royal Orchid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Eastern position performs unexpectedly, Royal Orchid 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 Royal Orchid will offset losses from the drop in Royal Orchid's long position.| Great Eastern vs. Pritish Nandy Communications | Great Eastern vs. Teamlease Services Limited | Great Eastern vs. Kavveri Telecom Products | Great Eastern vs. Sunflag Iron And |
| Royal Orchid vs. Hindcon Chemicals Limited | Royal Orchid vs. WESTLIFE FOODWORLD LIMITED | Royal Orchid vs. Sukhjit Starch Chemicals | Royal Orchid vs. Dodla Dairy 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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