Correlation Between Hindustan Foods and Juniper Hotels
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By analyzing existing cross correlation between Hindustan Foods Limited and Juniper Hotels, you can compare the effects of market volatilities on Hindustan Foods and Juniper Hotels 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 Hindustan Foods with a short position of Juniper Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hindustan Foods and Juniper Hotels.
Diversification Opportunities for Hindustan Foods and Juniper Hotels
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hindustan and Juniper is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hindustan Foods Limited and Juniper Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Hotels and Hindustan Foods 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 Hindustan Foods Limited are associated (or correlated) with Juniper Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Hotels has no effect on the direction of Hindustan Foods i.e., Hindustan Foods and Juniper Hotels go up and down completely randomly.
Pair Corralation between Hindustan Foods and Juniper Hotels
Assuming the 90 days trading horizon Hindustan Foods Limited is expected to under-perform the Juniper Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Hindustan Foods Limited is 1.56 times less risky than Juniper Hotels. The stock trades about -0.02 of its potential returns per unit of risk. The Juniper Hotels is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 40,150 in Juniper Hotels on August 29, 2024 and sell it today you would lose (3,990) from holding Juniper Hotels or give up 9.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 38.19% |
| Values | Daily Returns |
Hindustan Foods Limited vs. Juniper Hotels
Performance |
| Timeline |
| Hindustan Foods |
| Juniper Hotels |
Hindustan Foods and Juniper Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hindustan Foods and Juniper Hotels
The main advantage of trading using opposite Hindustan Foods and Juniper Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hindustan Foods position performs unexpectedly, Juniper Hotels 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 Juniper Hotels will offset losses from the drop in Juniper Hotels' long position.The idea behind Hindustan Foods Limited and Juniper Hotels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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