Correlation Between Lemon Tree and Repco Home
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By analyzing existing cross correlation between Lemon Tree Hotels and Repco Home Finance, you can compare the effects of market volatilities on Lemon Tree and Repco Home 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 Repco Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Repco Home.
Diversification Opportunities for Lemon Tree and Repco Home
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lemon and Repco is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Repco Home Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repco Home Finance 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 Repco Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repco Home Finance has no effect on the direction of Lemon Tree i.e., Lemon Tree and Repco Home go up and down completely randomly.
Pair Corralation between Lemon Tree and Repco Home
Assuming the 90 days trading horizon Lemon Tree is expected to generate 1.11 times less return on investment than Repco Home. But when comparing it to its historical volatility, Lemon Tree Hotels is 1.31 times less risky than Repco Home. It trades about 0.06 of its potential returns per unit of risk. Repco Home Finance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 22,318 in Repco Home Finance on October 28, 2024 and sell it today you would earn a total of 16,477 from holding Repco Home Finance or generate 73.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Repco Home Finance
Performance |
| Timeline |
| Lemon Tree Hotels |
| Repco Home Finance |
Lemon Tree and Repco Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Repco Home
The main advantage of trading using opposite Lemon Tree and Repco Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Repco Home 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 Repco Home will offset losses from the drop in Repco Home's long position.| Lemon Tree vs. UTI Asset Management | Lemon Tree vs. Mask Investments Limited | Lemon Tree vs. Transport of | Lemon Tree vs. Rajnandini Metal Limited |
| Repco Home vs. Ami Organics Limited | Repco Home vs. FCS Software Solutions | Repco Home vs. Tera Software Limited | Repco Home vs. Sapphire Foods India |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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