Correlation Between Megastar Foods and Oriental Hotels
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By analyzing existing cross correlation between Megastar Foods Limited and Oriental Hotels Limited, you can compare the effects of market volatilities on Megastar 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 Megastar Foods with a short position of Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Oriental Hotels.
Diversification Opportunities for Megastar Foods and Oriental Hotels
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Megastar and Oriental is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Megastar 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 Megastar 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 Megastar 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 Megastar Foods i.e., Megastar Foods and Oriental Hotels go up and down completely randomly.
Pair Corralation between Megastar Foods and Oriental Hotels
Assuming the 90 days trading horizon Megastar Foods is expected to generate 121.35 times less return on investment than Oriental Hotels. In addition to that, Megastar Foods is 1.03 times more volatile than Oriental Hotels Limited. It trades about 0.0 of its total potential returns per unit of risk. Oriental Hotels Limited is currently generating about 0.08 per unit of volatility. If you would invest 7,986 in Oriental Hotels Limited on September 3, 2024 and sell it today you would earn a total of 10,269 from holding Oriental Hotels Limited or generate 128.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Megastar Foods Limited vs. Oriental Hotels Limited
Performance |
| Timeline |
| Megastar Foods |
| Oriental Hotels |
Megastar Foods and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and Oriental Hotels
The main advantage of trading using opposite Megastar Foods and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar 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.| Megastar Foods vs. Tata Consultancy Services | Megastar Foods vs. Quess Corp Limited | Megastar Foods vs. Reliance Industries Limited | Megastar Foods vs. Infosys Limited |
| Oriental Hotels vs. Shyam Telecom Limited | Oriental Hotels vs. Modi Rubber Limited | Oriental Hotels vs. One 97 Communications | Oriental Hotels vs. Dhunseri Investments 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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