Correlation Between Lemon Tree and Kingfa Science
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By analyzing existing cross correlation between Lemon Tree Hotels and Kingfa Science Technology, you can compare the effects of market volatilities on Lemon Tree and Kingfa Science 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 Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Kingfa Science.
Diversification Opportunities for Lemon Tree and Kingfa Science
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lemon and Kingfa is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Kingfa Science Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingfa Science Technology 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 Kingfa Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingfa Science Technology has no effect on the direction of Lemon Tree i.e., Lemon Tree and Kingfa Science go up and down completely randomly.
Pair Corralation between Lemon Tree and Kingfa Science
Assuming the 90 days trading horizon Lemon Tree is expected to generate 1.82 times less return on investment than Kingfa Science. But when comparing it to its historical volatility, Lemon Tree Hotels is 1.37 times less risky than Kingfa Science. It trades about 0.03 of its potential returns per unit of risk. Kingfa Science Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 227,326 in Kingfa Science Technology on August 25, 2024 and sell it today you would earn a total of 58,794 from holding Kingfa Science Technology or generate 25.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Kingfa Science Technology
Performance |
| Timeline |
| Lemon Tree Hotels |
| Kingfa Science Technology |
Lemon Tree and Kingfa Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Kingfa Science
The main advantage of trading using opposite Lemon Tree and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Kingfa Science 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 Kingfa Science will offset losses from the drop in Kingfa Science's long position.| Lemon Tree vs. MMTC Limited | Lemon Tree vs. Kingfa Science Technology | Lemon Tree vs. Rico Auto Industries | Lemon Tree vs. GACM Technologies Limited |
| Kingfa Science vs. Rajnandini Metal Limited | Kingfa Science vs. Hisar Metal Industries | Kingfa Science vs. Associated Alcohols Breweries | Kingfa Science vs. Hilton Metal Forging |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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