Correlation Between Lemon Tree and Industrial Investment
Specify exactly 2 symbols:
By analyzing existing cross correlation between Lemon Tree Hotels and Industrial Investment Trust, you can compare the effects of market volatilities on Lemon Tree and Industrial Investment 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 Industrial Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Industrial Investment.
Diversification Opportunities for Lemon Tree and Industrial Investment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lemon and Industrial is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Industrial Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Investment 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 Industrial Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Investment has no effect on the direction of Lemon Tree i.e., Lemon Tree and Industrial Investment go up and down completely randomly.
Pair Corralation between Lemon Tree and Industrial Investment
Assuming the 90 days trading horizon Lemon Tree is expected to generate 2.07 times less return on investment than Industrial Investment. But when comparing it to its historical volatility, Lemon Tree Hotels is 1.7 times less risky than Industrial Investment. It trades about 0.26 of its potential returns per unit of risk. Industrial Investment Trust is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 34,170 in Industrial Investment Trust on September 2, 2024 and sell it today you would earn a total of 6,510 from holding Industrial Investment Trust or generate 19.05% 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. Industrial Investment Trust
Performance |
| Timeline |
| Lemon Tree Hotels |
| Industrial Investment |
Lemon Tree and Industrial Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Industrial Investment
The main advantage of trading using opposite Lemon Tree and Industrial Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Industrial Investment 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 Industrial Investment will offset losses from the drop in Industrial Investment'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 |
| Industrial Investment vs. State Bank of | Industrial Investment vs. Life Insurance | Industrial Investment vs. HDFC Bank Limited | Industrial Investment vs. ICICI Bank 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |