Correlation Between Indian Railway and Oriental Hotels
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By analyzing existing cross correlation between Indian Railway Finance and Oriental Hotels Limited, you can compare the effects of market volatilities on Indian Railway and Oriental 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 Indian Railway with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Railway and Oriental Hotels.
Diversification Opportunities for Indian Railway and Oriental Hotels
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indian and Oriental is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Indian Railway Finance and Oriental Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Hotels and Indian Railway 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 Indian Railway Finance are associated (or correlated) with Oriental Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Hotels has no effect on the direction of Indian Railway i.e., Indian Railway and Oriental Hotels go up and down completely randomly.
Pair Corralation between Indian Railway and Oriental Hotels
Assuming the 90 days trading horizon Indian Railway Finance is expected to under-perform the Oriental Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Indian Railway Finance is 1.34 times less risky than Oriental Hotels. The stock trades about -0.1 of its potential returns per unit of risk. The Oriental Hotels Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15,575 in Oriental Hotels Limited on September 2, 2024 and sell it today you would earn a total of 2,680 from holding Oriental Hotels Limited or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indian Railway Finance vs. Oriental Hotels Limited
Performance |
| Timeline |
| Indian Railway Finance |
| Oriental Hotels |
Indian Railway and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Railway and Oriental Hotels
The main advantage of trading using opposite Indian Railway and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Railway position performs unexpectedly, Oriental 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 Oriental Hotels will offset losses from the drop in Oriental Hotels' long position.| Indian Railway vs. Agro Tech Foods | Indian Railway vs. VIP Clothing Limited | Indian Railway vs. S P Apparels | Indian Railway vs. AAA Technologies Limited |
| Oriental Hotels vs. Indian Railway Finance | Oriental Hotels vs. Cholamandalam Financial Holdings | Oriental Hotels vs. Reliance Industries Limited | Oriental Hotels vs. Tata Consultancy Services |
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 CEOs Directory module to screen CEOs from public companies around the world.
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