Correlation Between HMT and Lotus Eye
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By analyzing existing cross correlation between HMT Limited and Lotus Eye Hospital, you can compare the effects of market volatilities on HMT and Lotus Eye 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 HMT with a short position of Lotus Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMT and Lotus Eye.
Diversification Opportunities for HMT and Lotus Eye
Poor diversification
The 3 months correlation between HMT and Lotus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding HMT Limited and Lotus Eye Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Eye Hospital and HMT 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 HMT Limited are associated (or correlated) with Lotus Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Eye Hospital has no effect on the direction of HMT i.e., HMT and Lotus Eye go up and down completely randomly.
Pair Corralation between HMT and Lotus Eye
Assuming the 90 days trading horizon HMT Limited is expected to under-perform the Lotus Eye. But the stock apears to be less risky and, when comparing its historical volatility, HMT Limited is 1.25 times less risky than Lotus Eye. The stock trades about -0.28 of its potential returns per unit of risk. The Lotus Eye Hospital is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,971 in Lotus Eye Hospital on September 1, 2024 and sell it today you would earn a total of 412.00 from holding Lotus Eye Hospital or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HMT Limited vs. Lotus Eye Hospital
Performance |
| Timeline |
| HMT Limited |
| Lotus Eye Hospital |
HMT and Lotus Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMT and Lotus Eye
The main advantage of trading using opposite HMT and Lotus Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMT position performs unexpectedly, Lotus Eye 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 Lotus Eye will offset losses from the drop in Lotus Eye's long position.| HMT vs. Cantabil Retail India | HMT vs. Future Retail Limited | HMT vs. Tamilnadu Telecommunication Limited | HMT vs. Baazar Style Retail |
| Lotus Eye vs. State Bank of | Lotus Eye vs. Life Insurance | Lotus Eye vs. HDFC Bank Limited | Lotus Eye vs. ICICI Bank 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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