Correlation Between Indian Hotels and Next Mediaworks
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By analyzing existing cross correlation between The Indian Hotels and Next Mediaworks Limited, you can compare the effects of market volatilities on Indian Hotels and Next Mediaworks 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 Indian Hotels with a short position of Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Hotels and Next Mediaworks.
Diversification Opportunities for Indian Hotels and Next Mediaworks
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indian and Next is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Indian Hotels and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks and Indian Hotels 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 The Indian Hotels are associated (or correlated) with Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of Indian Hotels i.e., Indian Hotels and Next Mediaworks go up and down completely randomly.
Pair Corralation between Indian Hotels and Next Mediaworks
Assuming the 90 days trading horizon The Indian Hotels is expected to generate 1.37 times more return on investment than Next Mediaworks. However, Indian Hotels is 1.37 times more volatile than Next Mediaworks Limited. It trades about -0.04 of its potential returns per unit of risk. Next Mediaworks Limited is currently generating about -0.65 per unit of risk. If you would invest 83,640 in The Indian Hotels on October 12, 2024 and sell it today you would lose (1,355) from holding The Indian Hotels or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Indian Hotels vs. Next Mediaworks Limited
Performance |
| Timeline |
| Indian Hotels |
| Next Mediaworks |
Indian Hotels and Next Mediaworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Hotels and Next Mediaworks
The main advantage of trading using opposite Indian Hotels and Next Mediaworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Hotels position performs unexpectedly, Next Mediaworks 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 Next Mediaworks will offset losses from the drop in Next Mediaworks' long position.| Indian Hotels vs. Foods Inns Limited | Indian Hotels vs. Shyam Metalics and | Indian Hotels vs. UFO Moviez India | Indian Hotels vs. Ankit Metal Power |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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