Correlation Between Lemon Tree and Gujarat Fluorochemicals
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By analyzing existing cross correlation between Lemon Tree Hotels and Gujarat Fluorochemicals Limited, you can compare the effects of market volatilities on Lemon Tree and Gujarat Fluorochemicals 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 Gujarat Fluorochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Gujarat Fluorochemicals.
Diversification Opportunities for Lemon Tree and Gujarat Fluorochemicals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lemon and Gujarat is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Gujarat Fluorochemicals Limite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Fluorochemicals 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 Gujarat Fluorochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Fluorochemicals has no effect on the direction of Lemon Tree i.e., Lemon Tree and Gujarat Fluorochemicals go up and down completely randomly.
Pair Corralation between Lemon Tree and Gujarat Fluorochemicals
Assuming the 90 days trading horizon Lemon Tree Hotels is expected to generate 1.02 times more return on investment than Gujarat Fluorochemicals. However, Lemon Tree is 1.02 times more volatile than Gujarat Fluorochemicals Limited. It trades about 0.31 of its potential returns per unit of risk. Gujarat Fluorochemicals Limited is currently generating about -0.25 per unit of risk. If you would invest 11,775 in Lemon Tree Hotels on September 1, 2024 and sell it today you would earn a total of 1,284 from holding Lemon Tree Hotels or generate 10.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Gujarat Fluorochemicals Limite
Performance |
| Timeline |
| Lemon Tree Hotels |
| Gujarat Fluorochemicals |
Lemon Tree and Gujarat Fluorochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Gujarat Fluorochemicals
The main advantage of trading using opposite Lemon Tree and Gujarat Fluorochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Gujarat Fluorochemicals 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 Gujarat Fluorochemicals will offset losses from the drop in Gujarat Fluorochemicals' long position.| Lemon Tree vs. Infomedia Press Limited | Lemon Tree vs. Shemaroo Entertainment Limited | Lemon Tree vs. Ravi Kumar Distilleries | Lemon Tree vs. Baazar Style Retail |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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