Correlation Between Global Education and Lemon Tree
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By analyzing existing cross correlation between Global Education Limited and Lemon Tree Hotels, you can compare the effects of market volatilities on Global Education 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 Global Education with a short position of Lemon Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Education and Lemon Tree.
Diversification Opportunities for Global Education and Lemon Tree
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Lemon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Education 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 Global Education 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 Global Education 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 Global Education i.e., Global Education and Lemon Tree go up and down completely randomly.
Pair Corralation between Global Education and Lemon Tree
Assuming the 90 days trading horizon Global Education Limited is expected to generate 146.7 times more return on investment than Lemon Tree. However, Global Education is 146.7 times more volatile than Lemon Tree Hotels. It trades about 0.19 of its potential returns per unit of risk. Lemon Tree Hotels is currently generating about 0.45 per unit of risk. If you would invest 6,938 in Global Education Limited on September 12, 2024 and sell it today you would earn a total of 1,205 from holding Global Education Limited or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Education Limited vs. Lemon Tree Hotels
Performance |
| Timeline |
| Global Education |
| Lemon Tree Hotels |
Global Education and Lemon Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Education and Lemon Tree
The main advantage of trading using opposite Global Education and Lemon Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Education 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.| Global Education vs. Hemisphere Properties India | Global Education vs. Indo Borax Chemicals | Global Education vs. Kingfa Science Technology | Global Education vs. Alkali Metals Limited |
| Lemon Tree vs. Hemisphere Properties India | Lemon Tree vs. Indo Borax Chemicals | Lemon Tree vs. Kingfa Science Technology | Lemon Tree vs. Alkali Metals 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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