Correlation Between Imagicaaworld Entertainment and Indian Hotels
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By analyzing existing cross correlation between Imagicaaworld Entertainment Limited and The Indian Hotels, you can compare the effects of market volatilities on Imagicaaworld Entertainment and Indian 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 Imagicaaworld Entertainment with a short position of Indian Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imagicaaworld Entertainment and Indian Hotels.
Diversification Opportunities for Imagicaaworld Entertainment and Indian Hotels
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Imagicaaworld and Indian is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Imagicaaworld Entertainment Li and The Indian Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Hotels and Imagicaaworld Entertainment 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 Imagicaaworld Entertainment Limited are associated (or correlated) with Indian Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Hotels has no effect on the direction of Imagicaaworld Entertainment i.e., Imagicaaworld Entertainment and Indian Hotels go up and down completely randomly.
Pair Corralation between Imagicaaworld Entertainment and Indian Hotels
Assuming the 90 days trading horizon Imagicaaworld Entertainment Limited is expected to under-perform the Indian Hotels. In addition to that, Imagicaaworld Entertainment is 1.28 times more volatile than The Indian Hotels. It trades about -0.35 of its total potential returns per unit of risk. The Indian Hotels is currently generating about -0.33 per unit of volatility. If you would invest 86,765 in The Indian Hotels on October 16, 2024 and sell it today you would lose (11,155) from holding The Indian Hotels or give up 12.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Imagicaaworld Entertainment Li vs. The Indian Hotels
Performance |
| Timeline |
| Imagicaaworld Entertainment |
| Indian Hotels |
Imagicaaworld Entertainment and Indian Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imagicaaworld Entertainment and Indian Hotels
The main advantage of trading using opposite Imagicaaworld Entertainment and Indian Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imagicaaworld Entertainment position performs unexpectedly, Indian 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 Indian Hotels will offset losses from the drop in Indian Hotels' long position.The idea behind Imagicaaworld Entertainment Limited and The Indian 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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