Correlation Between Lemon Tree and Life Insurance
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By analyzing existing cross correlation between Lemon Tree Hotels and Life Insurance, you can compare the effects of market volatilities on Lemon Tree and Life Insurance 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 Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Life Insurance.
Diversification Opportunities for Lemon Tree and Life Insurance
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lemon and Life is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance 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 Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of Lemon Tree i.e., Lemon Tree and Life Insurance go up and down completely randomly.
Pair Corralation between Lemon Tree and Life Insurance
Assuming the 90 days trading horizon Lemon Tree Hotels is expected to generate 1.05 times more return on investment than Life Insurance. However, Lemon Tree is 1.05 times more volatile than Life Insurance. It trades about 0.07 of its potential returns per unit of risk. Life Insurance is currently generating about 0.04 per unit of risk. If you would invest 8,445 in Lemon Tree Hotels on September 19, 2024 and sell it today you would earn a total of 6,824 from holding Lemon Tree Hotels or generate 80.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Life Insurance
Performance |
| Timeline |
| Lemon Tree Hotels |
| Life Insurance |
Lemon Tree and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Life Insurance
The main advantage of trading using opposite Lemon Tree and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Life Insurance 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 Life Insurance will offset losses from the drop in Life Insurance'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 |
| Life Insurance vs. Sasken Technologies Limited | Life Insurance vs. R S Software | Life Insurance vs. PB Fintech Limited | Life Insurance vs. Agro Tech Foods |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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