Correlation Between Lemon Tree and Can Fin
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By analyzing existing cross correlation between Lemon Tree Hotels and Can Fin Homes, you can compare the effects of market volatilities on Lemon Tree and Can Fin 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 Lemon Tree with a short position of Can Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Can Fin.
Diversification Opportunities for Lemon Tree and Can Fin
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lemon and Can is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Can Fin Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can Fin Homes and Lemon Tree 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 Lemon Tree Hotels are associated (or correlated) with Can Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can Fin Homes has no effect on the direction of Lemon Tree i.e., Lemon Tree and Can Fin go up and down completely randomly.
Pair Corralation between Lemon Tree and Can Fin
Assuming the 90 days trading horizon Lemon Tree Hotels is expected to generate 1.42 times more return on investment than Can Fin. However, Lemon Tree is 1.42 times more volatile than Can Fin Homes. It trades about 0.37 of its potential returns per unit of risk. Can Fin Homes is currently generating about -0.19 per unit of risk. If you would invest 11,709 in Lemon Tree Hotels on September 3, 2024 and sell it today you would earn a total of 1,350 from holding Lemon Tree Hotels or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Can Fin Homes
Performance |
| Timeline |
| Lemon Tree Hotels |
| Can Fin Homes |
Lemon Tree and Can Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Can Fin
The main advantage of trading using opposite Lemon Tree and Can Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Can Fin 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 Can Fin will offset losses from the drop in Can Fin's long position.| Lemon Tree vs. Gallantt Ispat Limited | Lemon Tree vs. Pondy Oxides Chemicals | Lemon Tree vs. Elgi Rubber | Lemon Tree vs. Sintex Plastics Technology |
| Can Fin vs. Reliance Industries Limited | Can Fin vs. Shipping | Can Fin vs. Indo Borax Chemicals | Can Fin vs. Kingfa Science Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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