Correlation Between Lemon Tree and Hi Tech
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By analyzing existing cross correlation between Lemon Tree Hotels and Hi Tech Pipes Limited, you can compare the effects of market volatilities on Lemon Tree and Hi Tech 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 Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Hi Tech.
Diversification Opportunities for Lemon Tree and Hi Tech
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lemon and HITECH is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Hi Tech Pipes Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech Pipes 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech Pipes has no effect on the direction of Lemon Tree i.e., Lemon Tree and Hi Tech go up and down completely randomly.
Pair Corralation between Lemon Tree and Hi Tech
Assuming the 90 days trading horizon Lemon Tree Hotels is expected to generate 0.74 times more return on investment than Hi Tech. However, Lemon Tree Hotels is 1.35 times less risky than Hi Tech. It trades about 0.45 of its potential returns per unit of risk. Hi Tech Pipes Limited is currently generating about -0.06 per unit of risk. If you would invest 12,398 in Lemon Tree Hotels on September 12, 2024 and sell it today you would earn a total of 1,883 from holding Lemon Tree Hotels or generate 15.19% 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. Hi Tech Pipes Limited
Performance |
| Timeline |
| Lemon Tree Hotels |
| Hi Tech Pipes |
Lemon Tree and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Hi Tech
The main advantage of trading using opposite Lemon Tree and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech'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 |
| Hi Tech vs. Steel Authority of | Hi Tech vs. Embassy Office Parks | Hi Tech vs. Indian Metals Ferro | Hi Tech vs. JTL Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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