Correlation Between Indian Hotels and NIIT
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By analyzing existing cross correlation between The Indian Hotels and NIIT Limited, you can compare the effects of market volatilities on Indian Hotels and NIIT 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 NIIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Hotels and NIIT.
Diversification Opportunities for Indian Hotels and NIIT
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Indian and NIIT is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Indian Hotels and NIIT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIIT Limited 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 NIIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIIT Limited has no effect on the direction of Indian Hotels i.e., Indian Hotels and NIIT go up and down completely randomly.
Pair Corralation between Indian Hotels and NIIT
Assuming the 90 days trading horizon The Indian Hotels is expected to generate 0.37 times more return on investment than NIIT. However, The Indian Hotels is 2.68 times less risky than NIIT. It trades about 0.13 of its potential returns per unit of risk. NIIT Limited is currently generating about 0.02 per unit of risk. If you would invest 31,686 in The Indian Hotels on September 20, 2024 and sell it today you would earn a total of 56,454 from holding The Indian Hotels or generate 178.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Indian Hotels vs. NIIT Limited
Performance |
| Timeline |
| Indian Hotels |
| NIIT Limited |
Indian Hotels and NIIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Hotels and NIIT
The main advantage of trading using opposite Indian Hotels and NIIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Hotels position performs unexpectedly, NIIT 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 NIIT will offset losses from the drop in NIIT's long position.| Indian Hotels vs. Indian Railway Finance | Indian Hotels vs. Cholamandalam Financial Holdings | Indian Hotels vs. Reliance Industries Limited | Indian Hotels vs. Tata Consultancy Services |
| NIIT vs. Sudarshan Chemical Industries | NIIT vs. JGCHEMICALS LIMITED | NIIT vs. Network18 Media Investments | NIIT vs. Mangalore Chemicals Fertilizers |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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