Correlation Between Lemon Tree and GAIL
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By analyzing existing cross correlation between Lemon Tree Hotels and GAIL Limited, you can compare the effects of market volatilities on Lemon Tree and GAIL 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 GAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and GAIL.
Diversification Opportunities for Lemon Tree and GAIL
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lemon and GAIL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and GAIL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAIL Limited 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 GAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAIL Limited has no effect on the direction of Lemon Tree i.e., Lemon Tree and GAIL go up and down completely randomly.
Pair Corralation between Lemon Tree and GAIL
Assuming the 90 days trading horizon Lemon Tree Hotels is expected to generate 0.68 times more return on investment than GAIL. However, Lemon Tree Hotels is 1.46 times less risky than GAIL. It trades about 0.26 of its potential returns per unit of risk. GAIL Limited is currently generating about 0.0 per unit of risk. If you would invest 11,991 in Lemon Tree Hotels on September 2, 2024 and sell it today you would earn a total of 1,068 from holding Lemon Tree Hotels or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemon Tree Hotels vs. GAIL Limited
Performance |
| Timeline |
| Lemon Tree Hotels |
| GAIL Limited |
Lemon Tree and GAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and GAIL
The main advantage of trading using opposite Lemon Tree and GAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, GAIL 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 GAIL will offset losses from the drop in GAIL's long position.| Lemon Tree vs. Indian Railway Finance | Lemon Tree vs. Cholamandalam Financial Holdings | Lemon Tree vs. Reliance Industries Limited | Lemon Tree vs. Tata Consultancy Services |
| GAIL vs. Oriental Hotels Limited | GAIL vs. V Mart Retail Limited | GAIL vs. Lemon Tree Hotels | GAIL vs. Sonata Software 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 Stocks Directory module to find actively traded stocks across global markets.
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