Correlation Between Lemon Tree and Global Education
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By analyzing existing cross correlation between Lemon Tree Hotels and Global Education Limited, you can compare the effects of market volatilities on Lemon Tree and Global Education 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 Global Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Global Education.
Diversification Opportunities for Lemon Tree and Global Education
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lemon and Global is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Global Education Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Education 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 Global Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Education has no effect on the direction of Lemon Tree i.e., Lemon Tree and Global Education go up and down completely randomly.
Pair Corralation between Lemon Tree and Global Education
Assuming the 90 days trading horizon Lemon Tree is expected to generate 63.55 times less return on investment than Global Education. But when comparing it to its historical volatility, Lemon Tree Hotels is 146.7 times less risky than Global Education. It trades about 0.45 of its potential returns per unit of risk. Global Education Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,938 in Global Education Limited on September 12, 2024 and sell it today you would earn a total of 1,205 from holding Global Education Limited or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Global Education Limited
Performance |
| Timeline |
| Lemon Tree Hotels |
| Global Education |
Lemon Tree and Global Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Global Education
The main advantage of trading using opposite Lemon Tree and Global Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Global Education 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 Global Education will offset losses from the drop in Global Education's long position.| Lemon Tree vs. Hemisphere Properties India | Lemon Tree vs. Indo Borax Chemicals | Lemon Tree vs. Kingfa Science Technology | Lemon Tree vs. Alkali Metals Limited |
| Global Education vs. Hemisphere Properties India | Global Education vs. Indo Borax Chemicals | Global Education vs. Kingfa Science Technology | Global Education vs. Alkali Metals 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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