Correlation Between Kamat Hotels and Megastar Foods
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By analyzing existing cross correlation between Kamat Hotels Limited and Megastar Foods Limited, you can compare the effects of market volatilities on Kamat Hotels and Megastar Foods 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 Kamat Hotels with a short position of Megastar Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamat Hotels and Megastar Foods.
Diversification Opportunities for Kamat Hotels and Megastar Foods
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kamat and Megastar is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kamat Hotels Limited and Megastar Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megastar Foods and Kamat 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 Kamat Hotels Limited are associated (or correlated) with Megastar Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megastar Foods has no effect on the direction of Kamat Hotels i.e., Kamat Hotels and Megastar Foods go up and down completely randomly.
Pair Corralation between Kamat Hotels and Megastar Foods
Assuming the 90 days trading horizon Kamat Hotels Limited is expected to generate 1.04 times more return on investment than Megastar Foods. However, Kamat Hotels is 1.04 times more volatile than Megastar Foods Limited. It trades about -0.01 of its potential returns per unit of risk. Megastar Foods Limited is currently generating about -0.05 per unit of risk. If you would invest 27,615 in Kamat Hotels Limited on September 14, 2024 and sell it today you would lose (3,691) from holding Kamat Hotels Limited or give up 13.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamat Hotels Limited vs. Megastar Foods Limited
Performance |
| Timeline |
| Kamat Hotels Limited |
| Megastar Foods |
Kamat Hotels and Megastar Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamat Hotels and Megastar Foods
The main advantage of trading using opposite Kamat Hotels and Megastar Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamat Hotels position performs unexpectedly, Megastar Foods 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 Megastar Foods will offset losses from the drop in Megastar Foods' long position.| Kamat Hotels vs. Indian Railway Finance | Kamat Hotels vs. Cholamandalam Financial Holdings | Kamat Hotels vs. Reliance Industries Limited | Kamat Hotels vs. Tata Consultancy Services |
| Megastar Foods vs. State Bank of | Megastar Foods vs. Life Insurance | Megastar Foods vs. HDFC Bank Limited | Megastar Foods vs. ICICI Bank Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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