Correlation Between Lemon Tree and India Glycols
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By analyzing existing cross correlation between Lemon Tree Hotels and India Glycols Limited, you can compare the effects of market volatilities on Lemon Tree and India Glycols 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 India Glycols. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and India Glycols.
Diversification Opportunities for Lemon Tree and India Glycols
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lemon and India is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and India Glycols Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Glycols 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 India Glycols. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Glycols Limited has no effect on the direction of Lemon Tree i.e., Lemon Tree and India Glycols go up and down completely randomly.
Pair Corralation between Lemon Tree and India Glycols
Assuming the 90 days trading horizon Lemon Tree is expected to generate 1.37 times less return on investment than India Glycols. But when comparing it to its historical volatility, Lemon Tree Hotels is 1.21 times less risky than India Glycols. It trades about 0.07 of its potential returns per unit of risk. India Glycols Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 61,503 in India Glycols Limited on September 1, 2024 and sell it today you would earn a total of 66,092 from holding India Glycols Limited or generate 107.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.33% |
| Values | Daily Returns |
Lemon Tree Hotels vs. India Glycols Limited
Performance |
| Timeline |
| Lemon Tree Hotels |
| India Glycols Limited |
Lemon Tree and India Glycols Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and India Glycols
The main advantage of trading using opposite Lemon Tree and India Glycols positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, India Glycols 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 India Glycols will offset losses from the drop in India Glycols' 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 |
| India Glycols vs. NMDC Limited | India Glycols vs. Steel Authority of | India Glycols vs. Embassy Office Parks | India Glycols vs. Gujarat Narmada Valley |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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