Correlation Between Kamat Hotels and Sumitomo Chemical
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By analyzing existing cross correlation between Kamat Hotels Limited and Sumitomo Chemical India, you can compare the effects of market volatilities on Kamat Hotels and Sumitomo Chemical 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 Sumitomo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamat Hotels and Sumitomo Chemical.
Diversification Opportunities for Kamat Hotels and Sumitomo Chemical
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kamat and Sumitomo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kamat Hotels Limited and Sumitomo Chemical India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Chemical India 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 Sumitomo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Chemical India has no effect on the direction of Kamat Hotels i.e., Kamat Hotels and Sumitomo Chemical go up and down completely randomly.
Pair Corralation between Kamat Hotels and Sumitomo Chemical
Assuming the 90 days trading horizon Kamat Hotels Limited is expected to generate 1.0 times more return on investment than Sumitomo Chemical. However, Kamat Hotels Limited is 1.0 times less risky than Sumitomo Chemical. It trades about 0.03 of its potential returns per unit of risk. Sumitomo Chemical India is currently generating about -0.03 per unit of risk. If you would invest 21,168 in Kamat Hotels Limited on August 31, 2024 and sell it today you would earn a total of 266.00 from holding Kamat Hotels Limited or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamat Hotels Limited vs. Sumitomo Chemical India
Performance |
| Timeline |
| Kamat Hotels Limited |
| Sumitomo Chemical India |
Kamat Hotels and Sumitomo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamat Hotels and Sumitomo Chemical
The main advantage of trading using opposite Kamat Hotels and Sumitomo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamat Hotels position performs unexpectedly, Sumitomo Chemical 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 Sumitomo Chemical will offset losses from the drop in Sumitomo Chemical's long position.| Kamat Hotels vs. Kingfa Science Technology | Kamat Hotels vs. GTL Limited | Kamat Hotels vs. Indo Amines Limited | Kamat Hotels vs. HDFC Mutual Fund |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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