Correlation Between LT Foods and Oriental Hotels
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By analyzing existing cross correlation between LT Foods Limited and Oriental Hotels Limited, you can compare the effects of market volatilities on LT Foods and Oriental 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 LT Foods with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of LT Foods and Oriental Hotels.
Diversification Opportunities for LT Foods and Oriental Hotels
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LTFOODS and Oriental is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding LT Foods Limited and Oriental Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Hotels and LT Foods 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 LT Foods Limited are associated (or correlated) with Oriental Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Hotels has no effect on the direction of LT Foods i.e., LT Foods and Oriental Hotels go up and down completely randomly.
Pair Corralation between LT Foods and Oriental Hotels
Assuming the 90 days trading horizon LT Foods Limited is expected to generate 0.99 times more return on investment than Oriental Hotels. However, LT Foods Limited is 1.01 times less risky than Oriental Hotels. It trades about -0.09 of its potential returns per unit of risk. Oriental Hotels Limited is currently generating about -0.11 per unit of risk. If you would invest 41,870 in LT Foods Limited on October 20, 2024 and sell it today you would lose (2,295) from holding LT Foods Limited or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LT Foods Limited vs. Oriental Hotels Limited
Performance |
| Timeline |
| LT Foods Limited |
| Oriental Hotels |
LT Foods and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LT Foods and Oriental Hotels
The main advantage of trading using opposite LT Foods and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LT Foods position performs unexpectedly, Oriental 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 Oriental Hotels will offset losses from the drop in Oriental Hotels' long position.| LT Foods vs. Computer Age Management | LT Foods vs. Compucom Software Limited | LT Foods vs. Sintex Plastics Technology | LT Foods vs. One 97 Communications |
| Oriental Hotels vs. LT Foods Limited | Oriental Hotels vs. Clean Science and | Oriental Hotels vs. ADF Foods Limited | Oriental Hotels vs. HT Media Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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