Correlation Between HDFC Bank and EIH Associated
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By analyzing existing cross correlation between HDFC Bank Limited and EIH Associated Hotels, you can compare the effects of market volatilities on HDFC Bank and EIH Associated 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 HDFC Bank with a short position of EIH Associated. Check out your portfolio center. Please also check ongoing floating volatility patterns of HDFC Bank and EIH Associated.
Diversification Opportunities for HDFC Bank and EIH Associated
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HDFC and EIH is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding HDFC Bank Limited and EIH Associated Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIH Associated Hotels and HDFC Bank 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 HDFC Bank Limited are associated (or correlated) with EIH Associated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIH Associated Hotels has no effect on the direction of HDFC Bank i.e., HDFC Bank and EIH Associated go up and down completely randomly.
Pair Corralation between HDFC Bank and EIH Associated
Assuming the 90 days trading horizon HDFC Bank Limited is expected to generate 0.31 times more return on investment than EIH Associated. However, HDFC Bank Limited is 3.24 times less risky than EIH Associated. It trades about -0.26 of its potential returns per unit of risk. EIH Associated Hotels is currently generating about -0.11 per unit of risk. If you would invest 177,790 in HDFC Bank Limited on October 31, 2024 and sell it today you would lose (10,750) from holding HDFC Bank Limited or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
HDFC Bank Limited vs. EIH Associated Hotels
Performance |
| Timeline |
| HDFC Bank Limited |
| EIH Associated Hotels |
HDFC Bank and EIH Associated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HDFC Bank and EIH Associated
The main advantage of trading using opposite HDFC Bank and EIH Associated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HDFC Bank position performs unexpectedly, EIH Associated 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 EIH Associated will offset losses from the drop in EIH Associated's long position.| HDFC Bank vs. Industrial Investment Trust | HDFC Bank vs. POWERGRID Infrastructure Investment | HDFC Bank vs. UTI Asset Management | HDFC Bank vs. Speciality Restaurants 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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