Correlation Between Lemon Tree and Zota Health
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By analyzing existing cross correlation between Lemon Tree Hotels and Zota Health Care, you can compare the effects of market volatilities on Lemon Tree and Zota Health 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 Zota Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemon Tree and Zota Health.
Diversification Opportunities for Lemon Tree and Zota Health
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lemon and Zota is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lemon Tree Hotels and Zota Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zota Health Care 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 Zota Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zota Health Care has no effect on the direction of Lemon Tree i.e., Lemon Tree and Zota Health go up and down completely randomly.
Pair Corralation between Lemon Tree and Zota Health
Assuming the 90 days trading horizon Lemon Tree is expected to generate 1.54 times less return on investment than Zota Health. But when comparing it to its historical volatility, Lemon Tree Hotels is 1.18 times less risky than Zota Health. It trades about 0.07 of its potential returns per unit of risk. Zota Health Care is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 30,239 in Zota Health Care on September 20, 2024 and sell it today you would earn a total of 46,136 from holding Zota Health Care or generate 152.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Lemon Tree Hotels vs. Zota Health Care
Performance |
| Timeline |
| Lemon Tree Hotels |
| Zota Health Care |
Lemon Tree and Zota Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemon Tree and Zota Health
The main advantage of trading using opposite Lemon Tree and Zota Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemon Tree position performs unexpectedly, Zota Health 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 Zota Health will offset losses from the drop in Zota Health'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 |
| Zota Health vs. Praxis Home Retail | Zota Health vs. SINCLAIRS HOTELS ORD | Zota Health vs. Associated Alcohols Breweries | Zota Health vs. Lemon Tree Hotels |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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