Correlation Between Lemon Tree and Kamat Hotels
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By analyzing existing cross correlation between Lemon Tree Hotels and Kamat Hotels Limited, you can compare the effects of market volatilities on Lemon Tree and Kamat Hotels 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 Kamat Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Kamat Hotels.
Diversification Opportunities for Lemon Tree and Kamat Hotels
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lemon and Kamat is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Kamat Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamat Hotels 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 Kamat Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamat Hotels Limited has no effect on the direction of Lemon Tree i.e., Lemon Tree and Kamat Hotels go up and down completely randomly.
Pair Corralation between Lemon Tree and Kamat Hotels
Assuming the 90 days trading horizon Lemon Tree Hotels is expected to generate 0.66 times more return on investment than Kamat Hotels. However, Lemon Tree Hotels is 1.52 times less risky than Kamat Hotels. It trades about 0.34 of its potential returns per unit of risk. Kamat Hotels Limited is currently generating about 0.02 per unit of risk. If you would invest 11,580 in Lemon Tree Hotels on August 31, 2024 and sell it today you would earn a total of 1,410 from holding Lemon Tree Hotels or generate 12.18% 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. Kamat Hotels Limited
Performance |
| Timeline |
| Lemon Tree Hotels |
| Kamat Hotels Limited |
Lemon Tree and Kamat Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Kamat Hotels
The main advantage of trading using opposite Lemon Tree and Kamat Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Kamat Hotels 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 Kamat Hotels will offset losses from the drop in Kamat Hotels' long position.| Lemon Tree vs. Gujarat Fluorochemicals Limited | Lemon Tree vs. TECIL Chemicals and | Lemon Tree vs. Fineotex Chemical Limited | Lemon Tree vs. JGCHEMICALS LIMITED |
| Kamat Hotels vs. Kingfa Science Technology | Kamat Hotels vs. GTL Limited | Kamat Hotels vs. Indo Amines Limited | Kamat Hotels vs. HDFC Mutual Fund |
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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