Correlation Between Lemon Tree and Samhi Hotels
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By analyzing existing cross correlation between Lemon Tree Hotels and Samhi Hotels Limited, you can compare the effects of market volatilities on Lemon Tree and Samhi 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 Samhi Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Samhi Hotels.
Diversification Opportunities for Lemon Tree and Samhi Hotels
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lemon and Samhi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Samhi Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhi 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 Samhi Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhi Hotels Limited has no effect on the direction of Lemon Tree i.e., Lemon Tree and Samhi Hotels go up and down completely randomly.
Pair Corralation between Lemon Tree and Samhi Hotels
Assuming the 90 days trading horizon Lemon Tree Hotels is expected to generate 0.76 times more return on investment than Samhi Hotels. However, Lemon Tree Hotels is 1.32 times less risky than Samhi Hotels. It trades about 0.22 of its potential returns per unit of risk. Samhi Hotels Limited is currently generating about -0.04 per unit of risk. If you would invest 11,623 in Lemon Tree Hotels on August 25, 2024 and sell it today you would earn a total of 877.00 from holding Lemon Tree Hotels or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Samhi Hotels Limited
Performance |
| Timeline |
| Lemon Tree Hotels |
| Samhi Hotels Limited |
Lemon Tree and Samhi Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Samhi Hotels
The main advantage of trading using opposite Lemon Tree and Samhi Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Samhi 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 Samhi Hotels will offset losses from the drop in Samhi Hotels' long position.| Lemon Tree vs. Reliance Industries Limited | Lemon Tree vs. Indian Oil | Lemon Tree vs. HDFC Bank Limited | Lemon Tree vs. Divis Laboratories Limited |
| Samhi Hotels vs. Reliance Communications Limited | Samhi Hotels vs. Chalet Hotels Limited | Samhi Hotels vs. DiGiSPICE Technologies Limited | Samhi Hotels vs. SINCLAIRS HOTELS ORD |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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